Mutual Fund Allocation is Important


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Investing in Mutual Funds

A wise strategy to grow your money is through mutual fund investment. They have the potential to produce returns that are higher than inflation, which can assist you in achieving your financial objectives. ...

What Are Mutual Funds?

A mutual fund is a type of financial instrument that pools money from investors to buy stocks, bonds, gold, and other assets. Companies that are eligible to establish mutual funds establish Asset Management Companies (AMCs) or Fund Houses, which collect investor cash, promote mutual funds, handle investments, and facilitate investor transactions.

Mutual funds are managed by reputable financial experts specializing in investment analysis and portfolio management, known as fund managers. According to the mutual fund investment objective, fund managers invest the money raised from investors in various financial assets, including stocks, bonds, and other assets. The fund managers are responsible for various tasks, including deciding the best-performing mutual funds.

The expense ratio is the cost to the investor that the AMC levies for managing the best mutual funds in India. It varies from mutual fund to mutual fund and is not a set cost. The maximum expense ratio that can be charged based on the fund's total assets has been fixed by SEBI.

Benefits of Mutual Funds

Professionally Managed

One of the key benefits of investing in these funds is that your money is managed by professional money managers with years of investing experience.


It has to do with how simple it is to buy and sell investments. Mutual fund investments have better liquidity than other instruments because you can purchase and sell them whenever you choose. 


The performance of these funds is evaluated in terms of the returns they provide, just like any other investment product. Historically, the returns provided by other conventional investment options, such as bank FDs, RDs, PPF, etc., have lagged behind mutual funds.


You only need INR 500 to begin investing in these funds. So you don't need a lot of money to start investing.


Since mutual funds invest in various securities, including stocks, bonds, and other financial instruments, even a little contribution can create a diversified portfolio, lowering risk.

Well Regulated

The SEBI oversees the regulation of mutual fund programs. The stringent regulations guarantee open procedures and defend the interests of investors.

Ways to Invest in Mutual Funds

SIP (Systematic Investment Plan)

SIP enables you to invest a certain amount over time. Due to its convenience, SIP is one of the most suggested methods for investing in the best-performing mutual fund schemes. Additionally, it aids in averaging the price at which you acquire the units of these funds. Find out more about Systematic Investment Plans (SIPs) here.


A lump sum investment is one that you make once. People typically make lump sum investments after receiving a large quantity of money, such as bonuses or cash from the sale of an asset.

Types of Mutual Funds Based on Asset Class

In India, mutual funds are divided into various groups according to the asset classes they invest in. Here are a few very common categories.

Equity Mutual Funds

Most of the assets that equity funds hold are equities. These funds are divided into various groups based on the market capitalization of the stocks they invest in.

Large-Cap Funds

These funds put at least 80% of their money into the top 100 market-cap corporations.

Mid-Cap Funds

These funds allocate at least 65% of their resources to the following 150 (101st to 250th) market capitalization-ranked companies.

Small-Cap funds

In such funds, at least 65% of the assets are allocated to investments in firms with market capitalizations of 251 and above.

Multi-Cap Funds

At least 25% of the assets in these funds are allocated to large, mid, and small-cap companies.

Debt Mutual Funds

Debt funds make money by lending to businesses and the government while also purchasing debt-related securities. These funds are divided into various groups based on the lending period's length and the papers' creditworthiness.

Money Market Funds

These funds

create returns by making short-term loans to businesses or governments for up to a year.

Corporate Bond Funds

These funds generate returns by loans to businesses with the highest-rated debt documents (at least 80%).

Overnight funds

These funds generate returns by lending money to businesses or governments for one business day.

Liquid Funds

These funds earn profits by making up to 91-day loans to businesses or governments.

Hybrid Funds

Equity, debt, and gold are just a few of the asset groups that hybrid funds may invest in. Hybrid funds can be divided into several types based on how much money they invest in various asset classes.

Aggressive Hybrid

These funds must invest at least 65% of their assets in stocks, but they can invest up to 80%. The remainder is owed.

Balanced Hybrid

Depending on the fund manager's assessment of the market environment, these funds may invest up to 40–60% in equities and debt securities.

Dynamic Asset Allocation Funds

These funds, also known as Balanced Advantage Funds, follow established asset allocation strategies and can hold up to 0–100% of their assets in either equities or debt.

Arbitrage Funds

These funds use the opportunities presented by securities' price discrepancies in several marketplaces to create returns.

Best Investment Themes

Mutual Funds for Beginners

Start your investments with ELSS (Tax Saving Schemes) and Aggressive Hybrid Funds, which can invest 65-80% in stocks. These are one of the best mutual funds in India.

Best SIP Funds

Selected funds that have regularly outperformed their counterparts in terms of SIP returns are included on the list.

ELSS (Tax Saving Funds)

The twin benefits of wealth creation and tax savings are the investing goals of these funds. Investing in ELSS can reduce your yearly tax liability by up to Rs. 46,800.

Value Investment Funds

These funds make money by investing in businesses whose stock price is trading below the value of their assets.

International Funds

By exposing you to businesses that aren't listed on Indian stock exchanges, these funds can help you diversify your portfolio geographically and lower risk overall.

How Can You Invest In Mutual Funds?

Wright Research offers three straightforward procedures for making mutual fund investments that are comfortable, easy, and quick:

  • Choose the basket of funds of your choice.
  • Establishing EasyPay and completing KYC without any documentation
  • Read more