Top 7 Mutual Funds For Beginners In 2023

Mutual funds are managed by fund managers who invest your money into different asset classes for profits. A mutual fund is one of the best investment options for everybody, especially for beginners. It is a corpus of money pooled from several investors professionally managed by a trust called asset management company (AMC). An AMC is also known as a mutual fund house. The fund house has experts, known as fund managers, who are responsible for investing the pooled money. This pooled money is then invested in various assets like equities, debt, corporate bonds, hybrid instruments, money market instruments like CP, CD, and T-bills to generate returns. You can consult a Cube Wealth coach or download a Cube Wealth App.

Mutual funds are ideal for investors who don't want to concentrate on a few companies, or for those who neither have the inclination nor the time to research the market, yet want to grow their wealth. They are the best option for beginners to enter in the investment market. The money collected in mutual funds is invested by professional fund managers in line with the scheme’s stated objective so there are less chances of losses. In return, the fund house charges a small fee which is deducted from the investment. However, we at Cube Wealth suggest you consult a financial advisor or a Cube Wealth Coach before investing in any assets. 

Below mentioned funds are the top 7 mutual funds for beginners because SIPs in low-risk index and tax-saving funds are suitable to begin with. After some time, When your income increases, you may consult a financial adviser or a Cube Wealth Coach for better advice on which funds are appropriate according to your financial goals.

‍1. ICICI Prudential Bluechip Fund

The ICICI Prudential Bluechip Fund Direct Growth has been there from 01 Jan 2013 and the average annual returns provided by this fund is 6.66% since its inception. The scheme seeks to generate long term capital appreciation and income distribution to investors from a portfolio that is predominantly invested in equity and equity related securities of large cap companies.

• Risk: Low
• 1-Year Returns: 10.16%
• 3-Year Returns: 20.82%
• 5-Year Returns: 11.88%
• AUM: ₹35,049.23 crores

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2. Kotak Nifty 50 Index Fund

The Kotak Nifty 50 Index Fund Direct Growth has been there from 21 Jun 2021 and the average annual returns provided by this fund is 4.11% since its inception. The scheme seeks to replicate the composition of the Nifty 50 and to generate returns that are commensurate with the performance of the NIFTY 50 Index, subject to tracking errors.

• Risk: Low
• 1-Year Returns: 8.24%
• 3-Year Returns: NA
• 5-Year Returns: NA
• AUM: ₹251.75 crores

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3. Kotak Tax Saver Fund

The Kotak Tax Saver Fund Direct Growth has been there from 01 Jan 2013 and the average annual returns provided by this fund is 9.64% since its inception. The investment objective of Kotak Tax Saver is to generate long term capital appreciation from a diversified portfolio of equity and equity related securities and enable investors to avail the income tax rebate, as permitted from time to time. The scheme thus offers a dual benefit of growth and tax savings.

• Risk: High
• 1-Year Returns: 11.84%
• 3-Year Returns: 20.73%
• 5-Year Returns: 13.52%
• AUM: ₹397.10 crores

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4. Quant Tax Plan

The Quant Tax Plan Direct Growth has been there from 07 Jan 2013 and the average annual returns provided by this fund is 8.97% since its inception. The scheme aims to generate capital appreciation by investing predominantly in equity shares with growth potential. The secondary objective is to give dividends and other income.

• Risk: High
• 1-Year Returns: 10.81%
• 3-Year Returns: 40.07%
• 5-Year Returns: 20.98%
• AUM: ₹2,506.48 crores

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5. Kotak Nifty Next 50 Index Fund

The Kotak Nifty Next 50 Index Fund Direct Growth has been there from 02 Mar 2021 and the average annual returns provided by this fund is 8.24% in one year. The investment objective of the scheme is to replicate the composition of the Nifty Next 50 and to generate returns that are commensurate with the performance of the NIFTY Next 50 Index, subject to tracking errors. 

• Risk: Low
• 1-Year Returns: 8.24%
• 3-Year Returns: NA
• 5-Year Returns: NA
• AUM: ₹102.60 crores

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6. Nippon India Nifty Smallcap 250 Index fund

The Nippon India Nifty Smallcap 250 Index Fund Direct Growth has been there from 16 Oct 2020 and the average annual returns provided by this fund is -1.85% since its inception. The investment objective of the scheme is to provide investment returns closely corresponding to the total returns of the securities as represented by the Nifty Smallcap 250 Index before expenses, subject to tracking errors. However, there can be no assurance or guarantee that the investment objective of the Scheme will be achieved. 

• Risk: High
• 1-Year Returns: 2.51%
• 3-Year Returns: NA
• 5-Year Returns: NA
• AUM: ₹397.10 crores

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7. Kotak Bluechip Fund

The Kotak Bluechip Fund Direct Growth has been there from 01 Jan 2013 and the average annual returns provided by this fund is 6.10% since its inception. The scheme seeks to generate capital appreciation from a portfolio of predominantly equity and equity related securities falling under the category of large Cap companies. 

• Risk: Low
• 1-Year Returns: 9.04%
• 3-Year Returns: 19.11%
• 5-Year Returns: 11.75%
• AUM: ₹5,256.16 crores

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FAQs

1. Which mutual fund is best for a starter?

Ans. A Mutual Fund is a type of investment vehicle that is essentially a group of stocks and/or bonds overseen by experts from an asset management firm. So in order to begin investing one can focus on the above mentioned funds but apart from that some funds that could be considered for investing will be ICICI Prudential Equity & Debt Fund, Nippon India Liquid Fund, SBI Liquid Fund, HDFC Liquid Fund, Invesco India Liquid Fund, ICICI Prudential Liquid Fund etc.

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2. How do beginners invest in mutual funds?

‍Ans. It is important to know about every possible investment option that can help you create more wealth. 

You may invest in mutual funds with the help of our Mutual Fund Advisors to select the best Investment plan for you. The mutual fund units would be held in the dematerialized form. You can have access to buying and selling mutual funds just like shares. 

Learn more about how beginners should invest here

‍3. How much should a beginner invest in mutual funds?

Ans. Yes, you can start investing in mutual funds for as low as ₹1000 on the Cube Wealth app. Cube gives you access to curated mutual funds from categories like liquid funds, international funds, equity funds, debt funds, ELSS funds, and more. Start investing today.

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4. Which SIP is best for beginners?

Ans. SIP(Systematic Investment Plan) allows the investors to manage their personal finance and create a financial cushion so that they can achieve the financial objectives of life. Some SIPs for beginners to invest are Edelweiss Liquid Fund, DSP Liquidity Fund, PGIM India Liquid Fund, Sundaram Liquid Fund, Mahindra Manulife Liquid Fund, Quant Liquid Fund etc. 

Conclusion 

Remember that investing for beginners is a learning process, and it's essential to continuously educate yourself about your investments and monitor your progress. As you gain experience and confidence, you can gradually explore more complex investment strategies. In the world of mutual funds, the key is to stay informed, stay patient, and make informed decisions that align with your long-term financial objectives. You can consult a Cube Wealth coach or download a Cube Wealth App.

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