The best thing about mutual funds is that they enable you to invest with very small amounts. SIP ( Systematic Investment Plans) of a lot of mutual funds allow min investment with just ₹1000.

When you set up an SIP with any mutual fund, your account is debited a fixed amount every month. This amount is invested in a mutual fund of your choice. Over a period of time, your investments accumulate and keep growing.

SIPs are increasingly becoming a favorite of investors as they tend to more or less smoothen out the anxiety related to market volatility. There are several investments where investors can invest a small sum of ₹500 – ₹1000 every month and build a solid mutual fund portfolio.

Read More: 13 Things to Know About SIP.

Here are the best funds to invest in with just ₹ 1000 from every mutual fund category.

Large Cap Fund

Large-cap companies 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.

Mirae Asset India Opportunities Fund

This is a Large Cap Equity Oriented Mutual Fund launched on April 04, 2008. It is a fund with moderately high risk and has 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 %

Invest in Mirae Asset India Opportunities Fund Now

  • This fund has been rated as a 5-star fund by Groww.
  • AUM of close to ₹6123 Cr.
  • Age is nearly 10 years.
  • 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 weight 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%.

The investment objective of the scheme is to generate long term capital appreciation by capitalizing on potential investment opportunities through predominantly investing in equities, equity related securities.

Mid Cap Fund

Here, the mutual fund invests 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 by market capitalization. The best mutual fund for ₹1000 per month 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%

Invest in Mirae Asset Emerging Bluechip Fund Now

  • This fund has been rated as a 5-star fund by Groww.
  • AUM of close to ₹ 5364 cr.
  • Age is nearly 7 years.
  • 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%.

The objective of this fund is to generate income and capital appreciation from a diversified portfolio predominantly investing in Indian equities and equity related securities of companies which are not part of the top 100 stocks by market capitalization and have market capitalization of at least Rs. 100 Crores at the time of investment.

From time to time, the fund manager may also seek participation in other Indian equity and equity related securities to achieve optimal Portfolio construction. The Scheme does not guarantee or assure any returns.

Small Cap Fund

In these types of funds, the fund manager invests major portion of the investors’ money in stocks of small cap companies. Small cap stands for small companies of the stock market and are all the companies apart from large and mid cap companies in a market. The best mutual fund for ₹1000 per month SIP in this category is.

Sundaram SMILE Fund

This is a Small Cap Equity Oriented Mutual Fund launched in February 15, 2005. It is a fund with high risk and has given a return of 19.68% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  28%
3 years  14.17%
5 years  28.54%

Invest in Sundaram SMILE Fund Now

  • This fund has been rated as a 4 star fund by Groww.
  • AUM of close to ₹1481 Cr.
  • Age is nearly 7 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark S&P BSE Small Cap since its launch.
  • The top portfolio holdings of the fund include Navin Fluorine International Ltd.,Rane Holdings Ltd., J K Cement Ltd., V-Guard Industries Ltd., Heritage Foods Ltd., ITD Cementation India Ltd., NRB Bearings Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Industrial Manufacturing ( 19.3 % ) followed by Construction ( 13 % ) and Financial Services ( 12.8 % ).

  • Minimum SIP = ₹1000
  • Equity share = 98.7% , Debt share = 0% and Cash = 1.3%.

  • Large Cap share= 0% , Mid Cap share = 60.3% and Small Cap share = 39.7%.

The investment objective of the scheme is to primarily achieve capital appreciation by investing in diversified stocks that are generally termed as small and mid caps and by investing in other equities.

However there is no assurance that the investment objective of the scheme will be achieved. The scheme does not guarantee/indicate any returns.

Multi-Cap Cap Fund

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 ₹ 1000 per month 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  16.4%
3 years  15.97%
5 years  NA

Invest in Motilal Oswal MOSt Focused Multicap 35 Fund Now

  • This fund has been rated as a 5 star fund by Groww.
  • 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 (44.9%) followed by Energy (13.2%) and Consumer Goods (12.8%).

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

  • Large Cap share= 79% , Mid Cap share = 21% and Small Cap share = 0%.

The investment objective of the Scheme is to achieve long term capital appreciation by primarily investing in a maximum of 35 equity & equity related instruments across sectors and market capitalization levels. However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved.

Sector Fund

A sector fund is a type of a mutual fund which invests in stocks of companies that operate in a particular industry or sector of the economy. The best mutual fund for ₹ 1000 per month SIP in this category is :

Sundaram Rural India Fund

This is a Sector Mutual Fund launched in May 12, 2006. It is a fund with moderately high risk and have given a return of 12.62% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  13.36%
3 years  18.51%
5 years  22.02%

Invest in Sundaram Rural India Fund Now

  • This fund has been rated as a 4 star fund by Groww.
  • AUM of close to ₹2198 Cr.
  • Age is nearly 11 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark S&P BSE 500 since its launch.
  • The top portfolio holdings of the fund include Mahindra & Mahindra Ltd., Hindustan Unilever Ltd., CBLO (CCIL), ITC Ltd., UPL Ltd., NCC Ltd., State Bank of India, Ujjivan Financial Services Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Consumer Goods (39.5%) followed by Financial Services (14.6%).

  • Minimum SIP = ₹1000
  • Equity share = 91.1% , Debt share = 0% and Cash = 8.9%.

  • Large Cap share= 49% , Mid Cap share = 39.4% and Small Cap share = 11.6%.

The primary investment objective of the scheme is to generate consistent long-term returns by investing predominantly in equity & equity related instruments of companies that are focusing on Rural India.

Index Fund

Index funds, as the name suggests, invest in an index. These funds purchase all the stocks in the same proportion as in a particular index. The scheme will perform in tandem with the index it is tracking, save for a small difference known as tracking error.

Unlike actively managed mutual funds, index funds passively track the performance of a particular index. These funds are not meant to outperform the market, but mimic the performance of the index. The best mutual fund for ₹ 1000 per month SIP in this category is :

ICICI Prudential Nifty Next 50 Index Fund 

This is a Index Mutual Fund launched in June 25, 2010. It is a fund with high risk and has given a return of 12.65% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  17.64%
3 years  12.87%
5 years  19.41%

Invest in ICICI Prudential Nifty Next 50 Index Fund now 

  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹157 Cr.
  • Age is nearly 7 years.
  • Has consistently outperformed its benchmark Nifty Next 50 TRI since its launch.
  • The top portfolio holdings of the fund include Titan Company Ltd., JSW Steel Ltd., Bajaj Finserv Ltd., Motherson Sumi Systems Ltd., Britannia Industries Ltd., Godrej Consumer Products Ltd., CBLO (CCIL) etc.
  • The holdings are balanced across various sectors with maximum weightage given to Consumer Goods (27.5%) followed by Financial Services (17.9%).

  • Minimum SIP = ₹1000
  • Equity share = 97.9% , Debt share = 0% and Cash = 2.1%.

  • Large Cap share = 89.3% , Mid Cap share = 10.7% and Small Cap share = 0%.

The investment objective of the Scheme is to invest in companies whose securities are included in Nifty Junior Index (the Index) and to endeavor to achieve the returns of the above index as closely as possible, though subject to tracking error. The Scheme will not seek to outperform the CNX Nifty Junior.

The objective is that the performance of the NAV of the Scheme should closely track the performance of the CNX Nifty Junior over the same period subject to tracking error.

Debt Fund

Debt funds are not only tax-efficient but can also offer higher returns to investors. We list out 10 different types of debt funds in which you can invest, based on your goals and investment tenure. The best mutual fund for ₹ 1000 per month SIP in this category is:

L&T Short Term Income Fund

This is a Short Term Fund type Debt Mutual Fund launched on December 04, 2010. It is debt fund with low risk and has given a return of 8.89% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  7.5%
3 years  8.78%
5 years  8.92%

Invest in L&T Short Term Income Fund Now

  • This fund has been rated 5-stars by Groww.
  • AUM of close to ₹1156 cr.
  • Age is nearly 7 years.
  • The top portfolio holdings of the fund include 8 Bharat Aluminium Co. Ltd. Jun 30, 2020, Sprit Textiles Pvt Ltd., CBLO (CCIL), 8.45 Tata Power Renewable Energy Ltd. etc.
  • The holdings are balanced across various sectors with maximum weight given to Financial Services (38.5%).
  • Minimum SIP = ₹1000

The investment objective of the Scheme is to generate reasonable returns primarily through investments in fixed income securities and money market instruments. There is no assurance that the objective of the Scheme will be realized and the Scheme does not assure or guarantee any returns.

Balanced Fund

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. The best mutual fund for ₹ 1000 per month SIP in this category is:

ICICI Prudential Balanced Advantage Fund 

This is a Hybrid Equity Oriented Mutual Fund launched in December 30, 2006. It is a fund with high risk and has given a return of 11.23% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  17.64%
3 years  12.87%
5 years  19.41%

Invest in ICICI Prudential Balanced Advantage Fund Now

  • This fund has been rated as a 4 star fund by Groww.
  • AUM of close to ₹24,228 Cr.
  • Age is nearly 11 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark CRISIL Hybrid 35+65 Aggressive since its launch.
  • The top portfolio holdings of the fund include 8.85 HDFC Bank Ltd., HDFC Bank Ltd., Infosys Ltd., Reliance Industries Ltd. (70D), ICICI Bank Ltd, Motherson Sumi Systems Ltd., 6.68 GOI Sep 17 2031 etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services (24.5%) followed by Automobile (16.8%).

  • Minimum SIP = ₹1000
  • Equity share = 38.3%, Debt share = 24.3%, and Cash = 37.4%.

  • Large Cap share = 78.2% , Mid Cap share = 21.6% and Small Cap share = 0.2%.

The investment objective of Wealth Optimiser Plan under the scheme is to seek to provide capital appreciation and income distribution to the investors by using equity derivatives strategies, arbitrage opportunities and pure equity investments.

Things to Remember

Don’t just run for returns from investment for investing in mutual funds. There are a lot of factors 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.

Read More: 10 Tips on investing in Mutual Funds

To ensure that the fund is in good hands, choose a fund house having fund manager with a 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.