Mutual Funds in India – How to make a profitable investment portfolio

Are you looking for information on what mutual funds are or how to invest in mutual funds? Do you want to know which mutual funds to invest in ? You need look no further. Read on to know all about the best mutual funds to invest in India. Learn tips on how to create the perfect portfolio that will make your investment grow.

You may wonder what is the need to invest in mutual funds when you can directly invest in the stock market? Well to begin with having basic knowledge about share market is insufficient for anyone as it will not assure profit on your investment. To be able to make good profit you need to have in-depth information about the share market. Remember it is a long drawn process that needs not just time and effort but also constant monitoring of stocks to pick the profitable ones. To cut it short, it is not a piece of cake and requires much diligence and time.

If you invest in stocks and shares you can expect a profit of approximately 20% to 30% on your investment provided you invest in the right shares and buy and sell them at an opportune time. By investing in mutual funds of a good company you can easily gross a minimum profit of 15% without effort from your end. This saves you the trouble of trading in stocks but helps in making an indirect profit from shares.

Mutual Fund Investments - Create Perfect Portfolios

If you want to make money from the stock market it is best to put your money in mutual funds. Let me explain.
Mutual Fund companies employ experts who follow the perfect strategies to study the market trend. They understand different market scenarios which you and I do not. They know the global market and the developments that take place there and how they affect the Bombay Stock Exchange and NIFTY. They use their knowledge and invest in shares with prospects of being profitable. Instead of focusing on a particular company they tactically spread the investments into diverse stocks so the chance of loss lowers.

How to Study Mutual Fund Portfolio

If you have invested in mutual funds it is imperative that you learn to track the investments of the fund. Here are a few tips that can be of help -

Mutual funds make public their portfolios every six months. You need to study this carefully
Most mutual funds provide an abridged summary of their portfolio every month. It is concise and it would be nice if you could go through it before investing
You will need to check how the investment is distributed; that is the ratio between large and small caps
Study the stock classification; check the ratio of large market capitalization against small caps
Check the debt classification; see if the fund has the CRISIL AAA rating for debt
Does the fund have liquid stocks? This means stock that has been sitting idle for more than a month. This is not a good sign
Check the cash to stocks ratio. Maximum amount of your money must be invested
How much dividend has the fund announced for the previous financial year
Has the fund invested in a company that is in red? This is bad news, as it will take you years to make up the loss

Understand the Difference between Debt Fund and Equity Fund

You do not have to be a financial wizard to be able to find if the fund is debt based or equity based. You need to read the fine print in the offer document where the fund clearly states its objectives. Mutual fund companies' investments are chiefly done in equities although the fund may allocate a small percentage of the investment for debt. However, there are a few mutual funds that invest only in debt. You also have an option of selecting a balanced fund with a specific balance of debt and equity which it maintains.

Best Mutual Funds to Invest

How does one categorize the best mutual funds? There is no particular grading method for individuals to follow. The fund that gives the best returns on an investment over a period of time can be termed as being viable. Here some funds that have been giving promising results since the time they were opened.

HDFC Equity Fund Growth

This fund has been around for almost 16 years. In this period the fund has given steady returns of over 22%. Remember this includes the phase when the market was sluggish because of a global financial crisis. This is a good fund to invest in. In the period since 2007 up till now the fund has given its investors returns of around 19%.

HDFC Top 200 Growth

The fund opened in 1996 and has since been consistently giving good returns to its investors. This fund has a good track record and is an excellent fund to invest in even today.

IDFC Premier Equity Growth Plan – A Growth

The fund started in 2005 September and recorded good growth in a short period. It has the potential to continue doing well. In the first 7 years since its launch the fund gave returns of almost 23%. This was again a period where the market was unstable.

Here are top 5 mutual funds under different categories that you can invest in–

Diversified Mutual Funds
Top 5 Diversified Mutual Funds 2012

Debt Schemes Mutual Funds
Top 5 Debt Schemes Mutual Funds 2012

Balanced Schemes Mutual Funds
Top 5 Balanced Schemes Mutual Funds 2012

My Opinion on Mutual Funds

I am no financial analyst and my opinion is based on pure experience. Yes, I study the market to identify the best funds before investing. Here are the best mutual funds for your investment portfolio and a list of tips on how to pick the best mutual funds . I can confidently say mutual funds are a safe way of earning profit. I know my mutual fund portfolio is managed by experts in the field so the chances of loss are minimal. Ask me anything about mutual funds and I will willingly share my knowledge with you.

Are Mutual Fund and ULIP the same thing?

Mutual Fund or ULIP? Many of us have this question in mind. This resource will help you to understand the difference between Mutual Fund and a ULIP.

How to invest in the right manner

This article gives information about various ways to invest money in India. It provides suggestions about various investment avenues, useful tips on how to save money and how such saving methods can make you wealthy.

How to choose the right mutual fund scheme?

A mutual fund pools the funds of innumerable investors to invest in shares or securities defined by the asset allocation policy of the mutual fund scheme. Are you also planning to invest your hard earned money in mutual fund scheme? Then, read this article for an in-depth understanding of how to select the right mutual fund scheme to avoid losses and earn profits.

What are the investment options for women?

The most vital factor that plays an important role for investment is the risk taking the capacity of the investor i.e. how far can he go to take risks because upon it rests to a greater extent the likely returns. Well, let’s see the investment options available after taking into account the risks involved.

The best and profitable mutual fund investment plans in 2012

New year has began. This is the most suitable time for investing in mutual funds. This article gives a list of mutual funds which assures the probability of maximum profit at present. It also deals with tax savings funds, Fidility tax advantage, Religer tax plan, ICICI prudential tax plan and ING tax savings. I have also written about important gold funds. Read on.