The best thing about mutual funds is that they enable you to invest with very small amounts. Many people ask what is the minimum amount to invest in mutual funds? There is no other way you can invest with reasonable diversification with an amount as low as ₹ 100 and even ₹ 50. SIP ( Systematic Investment Plans) of a lot of mutual funds allow min investment with just ₹ 100 and ₹ 500.

Systematic Investment Plan (SIP) is an instrument which helps you avoid the risk of timing the markets and facilitate wealth creation in a disciplined manner by averaging cost of Investments. Small savings create the big corpus for future.

Read More : 9 Reasons Why SIP Investment Is the Best Way to Invest

Let’s find out the best mutual fund for a SIP in all Equity Oriented Mutual Fund Categories.

Read More : Funds to start SIP in with just ₹ 100

Large Cap Fund Category

Large cap are big, well-established companies of the equity market. These companies are strong, reputable and trustworthy. Large-cap companies generally are top 100 companies in a market. When mutual funds invest their capital in large-cap companies then these funds are called Large Cap equity funds.

The best mutual fund for SIP in this category is :

Mirae Asset India Opportunities Fund

This is a Large Cap Equity Oriented Mutual Fund launched in April 04, 2008. It is a fund with moderately high risk and have given a return of 16.88 % since its launch.

Returns per annum over the years from this fund are :

Duration Returns
1 year  22.13 %
3 years  12.32 %
5 years  21.54 %

Performance of the fund since 2008 :

Here’s the key features of Mirae Asset India Opportunities Fund :

  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 6123 Cr.
  • Age is nearly 10 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark S&P BSE 200 Fund since its launch.
  • The top portfolio holdings of the fund include ICICI Bank Ltd., HDFC Bank Ltd., Larsen & Toubro Ltd., Reliance Industries Ltd., SBI, Infosys Ltd., Maruti Suzuki India Ltd., Kotak Mahindra Bank Ltd., Grasim Industries Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to the Financial Services ( 35.4 % ) followed by Automobile ( 10.3 % ) and Consumer Goods ( 9.6 % ).

  • Minimum SIP = ₹ 1000
  • Equity share = 97 % , Debt share = 0.2 % and Cash = 2.8 %

  • Large Cap share= 84.9 % , Mid Cap share = 15.1 % and Small Cap share = 0 %

This fund is one of the best large cap fund available in market. Associate with this fund, if you are thinking of investing a lump sum amount or for longer duration. Large cap funds may give you good returns on your lump sum investment over the long term. The companies in the large cap funds portfolio are steady compounders and pay dividend on regular basis.

Mid Cap Fund Category

Here, the mutual fund invest in stocks of mid-size companies. Mid-caps are compact companies of the equity market, falling somewhere between small and large cap companies and are 100-250 companies in a market after large-cap companies.

The best mutual fund for SIP in this category is :

Mirae Asset Emerging Bluechip Fund

This is a  Mid Cap Equity Oriented Mutual Fund launched in July 9, 2010. It is a fund with moderately high risk and has given a return of 23.40 % since its launch.

Returns per annum over the years from this fund are :

Duration Returns
1 year  23.72 %
3 years  19.47 %
5 years  30.77 %

Performance of the fund since 2008 :

Here’s the key features Mirae Asset Emerging Bluechip Fund :

  • This fund has been rated as a 5-star fund by Groww.
  • AUM of close to ₹ 5364 Cr.
  • Age is nearly 7 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty Free Float Midcap 100 since its launch.
  • The top portfolio holdings of the fund include Tata Global Beverages Ltd., ICICI Bank Ltd., Kotak Mahindra Bank Ltd., Raymond Ltd., HDFC Bank Ltd., Federal Bank Ltd., Info Edge Ltd., IndusInd Bank Ltd., Ceat Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services ( 25.9 % ) followed by Consumer Goods ( 12.8 % )

  • Minimum SIP = ₹ 1000
  • Equity share = 98.8 % , Debt share = 0.1 % and Cash = 1.1 %

  • Large Cap share = 36.8 % , Mid Cap share = 57.6 % and Small Cap share = 5.6%.

This is one the best performing mid cap fund available in market for 2018. Mid cap fund are in high demand, because the share price of large caps has increased substantially. That results in the prices of the mid-caps, climbing upwards steadily and made them an attractive investment category with high growth potential.

So, associated with this fund if you want to invest in funds with high return possibilities, without the volatility of small caps and index-related returns like those of large cap funds.

Small Cap Fund Category

In these types of funds, fund manager invests major portion of the investors’ money in stocks of small cap companies. Small cap are small companies of stock market and are all the companies apart from large and mid cap companies in a market.

The best mutual fund for SIP in this category is :

HDFC Small Cap Fund

This is a Small Cap Equity Oriented Mutual Fund launched in April 03, 2008. It is a fund with high risk and have given a return of 16.60 % since its launch.

Returns per annum over the years from this fund are :

Duration Returns
1 year  44.19 %
3 years  21.21 %
5 years  25.14 %

Performance of the fund since 2008 :

Invest in HDFC Small Cap Fund Now :

  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 2152 Cr.
  • Age is nearly 10 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty Free Float Small cap 100 since its launch.
  • The top portfolio holdings of the fund include Sonata Software Ltd., CBLO ( CCIL ), Redington India Ltd., Aarti Industries Ltd., KEC International Ltd., Dilip Buildcon Ltd., Balkrishna Industries Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Industrial Manufacturing ( 15.1 % ) followed by Automobile ( 14.7 % ) and IT ( 11.5 % )

  • Minimum SIP = ₹ 500
  • Equity share = 85.9 % , Debt share = 0 % and Cash = 14.1%.

  • Large Cap share = 1 % , Mid Cap share = 58.5 % and Small Cap share = 40.9%

This funds have exponential growth potential and give high returns on investment and is best suited for investors with high risk appetite or for seasoned investors. Also, this best for investors who have very good ideas of mutual funds and the risks associates with them. Associated with this fund for some good numbers of years for getting benefit of its high return on investment.

Multi Cap Fund Category

These funds are used to minimize the risk and diversify the investment. In these funds, capital is invested in companies across different sectors and of different capitalization.

The best mutual fund for SIP in this category is :

Motilal Oswal MOSt Focused Multicap 35 Fund

This is a  Multi Cap Equity Oriented Mutual Fund launched in April 28, 2014. It is a fund with moderately high risk and have given a return of 28.83 % since its launch.

Returns per annum over the years from this fund are :

Duration Returns
1 year  23.72 %
3 years  19.47 %
5 years  30.77 %

Performance of the fund since 2008 :

Invest in Motilal Oswal MOSt Focused Multicap 35 Fund Now :

  • This fund has been rated as a 5 star fund by Groww and ranked 1 in Diversified equity category by Crisil.
  • AUM of close to ₹ 11411 Cr.
  • Launched just 3 years back, so performance cannot be easy to judge. Though its a relatively new fund, it has made its mark with high return on investment.
  • Has consistently outperformed its benchmark Nifty 500 since its launch.
  • The top portfolio holdings of the fund include United Spirits Ltd.,BPCL, HDFC Bank Ltd., Maruti Suzuki India Ltd., HPCL, Jubilant Life Sciences Ltd., Interglobe Aviation Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services (45.5%) followed by Energy ( 13.6 % ) and Consumer Goods ( 12.7 % ).

  • Minimum SIP = ₹ 1000.
  • Equity share = 98.8 % , Debt share = 0 % and Cash = 1.2 %

  • Large Cap share= 76.4 % , Mid Cap share = 23.6 % and Small Cap share = 5.6%.

This is one of the best performing multi-cap fund available in the market right now, even though it launched just 3 years back. This is a diversified fund withholding in companies of different market capitalization.

Multi-cap funds are risky as compared to large-cap funds and depend a lot on the ability of fund manager. Associated with this fund for some good numbers of years for getting the benefit of its high return on investment.

Hybrid Cap Fund Category

Balanced funds are investment instrument, where an asset management company invest the money gather into both debt and equity. These are diversified mutual funds having perfect balance between risk and returns on investment, and are most popular mutual funds these days.

These are broadly of two types :

  • Equity oriented balanced funds : Major portion of fund portfolio consists of equities, at least 65%, and rest in debts. Aim here is to minimize risk on investment
  • Debt oriented balanced funds : Major portion of fund portfolio consists of debt and rest in equity. Aim here is to increase return on investment.

The best mutual fund for SIP in this category is :

Tata Retirement Savings Fund – Moderate Plan

This is a Hybrid Equity Oriented Mutual Fund launched in November 1, 2011. It is a fund with moderately high risk and have given a return of 18.35 % since its launch.

Returns per annum over the years from this fund are :

Duration Returns
1 year  20.16 %
3 years  11.68 %
5 years  20.57 %

Performance of the fund since 2008 :

Here’s the key features of Tata Retirement Savings Fund – Moderate Plan :

  • This fund has been rated as a 5 star fund by Groww and ranked 1 in Diversified equity category by Crisil.
  • AUM of close to ₹ 502 Cr.
  • Launched just 6 years back, so performance cannot be easy to judge. Though its a relatively new fund, it has made its mark with high return on investment.
  • Has consistently outperformed its benchmark Nifty 500 since its launch.
  • The top portfolio holdings of the fund include United Spirits Ltd.,BPCL, HDFC Bank Ltd., Maruti Suzuki India Ltd., HPCL, Jubilant Life Sciences Ltd., Interglobe Aviation Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services (25.8%) followed by Automobile ( 12.6 % ) and Consumer Goods ( 19 % ).

  • Minimum SIP = ₹ 500.
  • Equity share = 75.7 % , Debt share = 1 % and Cash = 23.2 %

  • Large Cap share= 76.4 % , Mid Cap share = 23.6 % and Small Cap share = 5.6%.

This is one of the best performing balanced fund available in the market right now, even though it launched just 6 years back. This is a diversified fund withholding in companies of different market capitalization.

This balanced funds are good for average investors looking to invest in equities. A lot of people follow stock markets and wish to invest in the shares offered by various companies, but they fear that they don’t have enough knowledge or don’t have sufficient time to keep track on and follow the latest buzz about the dynamic market. Balance fund is the perfect solution for them as investing directly in equity market is a risk, not everyone willing to take.

Things to Remember

Returns have always been the basic benchmarks for investor while going for any investments. These indicate how much the fund has lost or gained during particular investment duration.But don’t just run for returns from investment for investing in Mutual Funds.

There lot of things you should look into before selecting a fund which will match your investment goals. Following the 3 things you should always remember before investing in Mutual Funds :

  • Higher rates : don’t blindly invest in the fund with the highest returns. Invest based on the duration you want to invest for.
  • Every person’s financial condition is different. Evaluate the funds you invest in yourself – don’t invest in a fund because of its popularity.
  • Review your investment from time to time but not too often. Once a few weeks is good enough.

If you a beginner to investment in mutual funds, especially in equity mutual fund, thinking of the small/mid cap mutual funds may not be the best idea for you. These are best for investors who have very good ideas of mutual funds and the risks associates with them.

To ensure that the fund is in good hands, choose a fund house having fund manager with good amount of experience managing small/mid cap funds and associated with these funds for some good numbers of years.

To look at some of the best performing funds from every category of mutual funds, check out Groww 30 best mutual funds to invest in 2018.

Happy Investing!

Disclaimer: the views expressed here are of the author and do not reflect those of Groww.