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Top 5 Funds to Invest for Long Term Wealth Generation

06 June 2022

There are numerous ways to generate wealth in 2022, but investing in Mutual Funds is widely regarded as the best option for diversification and high growth returns.

In this category, we must first determine whether we are looking at Large-Cap, Mid-Cap, or a Mix of both Mutual Funds. Large-cap funds are Mutual Funds that invest in large-capitalization companies that make huge profits year after year and are nearly consistent in their performance. As a result, investing in these funds carries a lower risk.

Small-Cap funds include companies with low market capitalization, most likely because they are new to the market and want to raise funds, so they sell their shares, so the risk is comparatively high in this case.

However, some of these have the potential to make huge profits in the future, so investing in them for the long term can reap greater rewards. Now combining these two forms, Multi-Cap funds invest in both Large-Cap and Small Funds by analyzing the companies and sectors thoroughly.

So, now that you understand why some of the funds are in this portfolio, let's take a look at which funds are the best rated by Groww.

In this blog, we have composed a list of the Best Mutual Funds to Invest in for Long-term wealth generation. 

Long-Term Mutual Funds for Wealth Generation 2022

S.No.

Mutual Funds

1.

Mirae Asset Tax Saver Fund Direct-Growth

2.

DSP Tax-Saver Direct-Plan-Growth

3.

Canara Robeco Emerging Equities Fund Direct-Growth

4.

SBI Focused Equity Fund Direct-Plan-Growth

5.

Tata Digital India Fund Direct-Growth

Factors to Consider Before Investing in The Best Long-Term Mutual Funds for Wealth Generation

  • The Risk and Return Trade-off of Various Mutual Fund Categories Differ from One Another

One of the most relevant points to remember would be that the risk and return trade-off of different mutual fund segments tends to vary. It is very difficult to determine the various levels of risks in any specific components of mutual funds through specific factors or scales and this is because the risk that comes with every different category of mutual funds is not the same.

  • Select The Option That Is the Most Suitable and Appropriate For YOU!

Begin your search for the selection of an appropriate mutual fund by determining your investment and financing goals and your risk appetite.

For investment and capital gains exceeding over a year or so, make sure that you engage in a lengthy mutual fund asset where your money will be accumulated for over a period of 12 months or even more but if you are a fan of current income, make sure that you invest in brief and short-term schemes.

  • Category V/S Fund Rationale

One of the most common investing practices amongst people includes investing in a fund that is ranked the highest on internet sites or mutual fund organizations but it is more important to clearly identify the category that is most suitable for yourself.  You can begin analyzing the funds once you've decided which categories your portfolio to include.

The most significant factor to keep in mind is the availability and stability of funds, the rate of annual returns, expense ratio, and financial adviser.

  • Remember That Over-Diversification Can Be Risky

It is a well-known fact that "diversification reduces risk", however, risk mitigation is not proportional to over-diversification. Funds will not boost gains beyond a basic level of diversification. Beginner investors should start with the basics and work their way up.

There's a chance that in your haste, you'll end up adding similar funds to your portfolio, which will lead to lower returns.

  • It Is Highly Unlikely for You to Receive the Same Returns Every Year

When people talk about Mutual Fund returns, what they usually mean are annualized returns. This may create an impression that your returns will be consistent year after year.

Assume that the annualized returns of a particular Mutual Fund Scheme are 8%, this does not really guarantee that you'll make 8% yearly. This is due to the fact that mutual fund returns are not consistent.

A Mutual Fund Scheme, for example, could give you +10% returns in 2021 but might only give you -2% returns in 2022. There also may be times when there are no returns at all. As a result, you should expect this variability in your annual returns as well.

Performance Of the Best Mutual Funds for Long-Term Growth

  1. Mirae Asset Tax Saver Fund Direct-Growth

Mirae Asset Tax Saver Fund Direct-Growth is an Equity Mutual Fund Scheme launched by Mirae Asset Mutual Fund. The scheme seeks to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related instruments.

  1. DSP Tax-Saver Direct-Plan-Growth

DSP Tax Saver Direct Plan-Growth is an Equity Mutual Fund Scheme launched by DSP Mutual Fund. The scheme seeks to generate medium to long-term capital appreciation from a diversified portfolio that is substantially constituted of equity and equity-related securities of corporates, and enable investors to avail of deduction from total income, as permitted under the income tax act.

  1. Canara Robeco Emerging Equities Fund Direct-Growth

Canara Robeco Emerging Equities Fund Direct-Growth is an Equity Mutual Fund Scheme launched by Canara Robeco Mutual Fund. The scheme seeks to generate capital appreciation by investing in a diversified portfolio of large and mid-cap stocks.

  1. SBI Focused Equity Fund Direct-Plan-Growth

SBI Focused Equity Fund Direct Plan-Growth is an Equity Mutual Fund Scheme launched by SBI Mutual Fund. The scheme seeks to provide the investor with the opportunity for long-term capital appreciation by investing in a concentrated portfolio of equity and equity-related securities.

  1. Tata Digital India Fund Direct-Growth

Tata Digital India Fund Direct-Growth is an Equity Mutual Fund Scheme launched by Tata Mutual Fund. The scheme seeks long-term capital appreciation by investing at least 80% of its net assets in equity/equity-related instruments of the companies in the Information Technology Sector in India.

You may also want to read Long-Term Mutual Fund Investment Strategy

Conclusion

This was the list of the 5 Best Long-Term Mutual Funds for wealth generation in 2022. We hope that this blog helps you observe the best Mutual Funds that you could invest in if you are looking for Long-Term Investment Plans and with proper research helps you in making the right financial decisions.

As seen in the above Mutual Funds, all are best rated by Groww and are performing well above the competitor's benchmark. This mix created by Groww is suggested to have good long-term returns.

Lastly, investing in mutual funds online is as easy as shopping online. Just log on to Groww.

Happy Investing!

Disclaimer: The views expressed in this post are that of the author and not those of Groww.

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