Important factors before deciding on what mutual fund to invest in-
- Duration of the investment
- Risk taking appetite
- Return expectation
- Investment objective of the investor
Choice of the ideal SIP fund can be broadly categorized into the following 3 categories-
- 0-3 years- When investment duration is less than 3 years, invest in this portfolio called 'Short Term Low Risk Portfolio'. It consists of 3 debt funds and 1 balanced fund and is designed to give you a stable return in the short term.
- 5 years- When investment duration is around 5 years, invest in the portfolio 'SIPs for 5 yrs Moderate Risk. It has 3 mutual mutual funds of which 2 are equity funds and 1 is a debt fund.
- 10+ years- When investment duration is 10 years or more, invest seeking high returns with higher risks. You can look at the portfolio, 5 Best SIPs To Invest In FY 2017-2018. This fund has 4 equity funds and 1 balanced fund. It aims to take advantage of the incredible growth experienced by equity funds over a long period of time.
You can read more about most suggested SIP schemes here.