Which SIP mutual fund category is best to start investing with?

Pawan Kumar

Pawan Kumar, Co Founder and CTO at Fincash.com (2016-present)

Répondu il y a 33w · L'auteur dispose de réponses 376 et de vues de réponses 1.1m

Merci pour A2A.

Coming straight to the point, I would like to tell that there are a number of schemes that you can choose to invest. Since SIP is generally in the context of equity funds, therefore, in this answer we would be focusing more on equity funds. Let us first look into the various types of equity funds and some of the best schemes in each category.

Large Cap Funds

Large-cap funds are the schemes whose fund money is invested in shares of large-cap companies. These companies have a market capitalization of more than INR 10,000 crores. These companies are mostly bluechip companies who earn steady growth and income on a yearly basis. Their risk appetite is not very high and are considered to earn good returns over long-term. People with a moderate risk-appetite can choose to invest in large-cap funds for long-term. Some of the best schemes that you can choose for investment are as follows.

  • Axis Focused 25 Fund – 25.4% (1 Yr) 12.2% (3 Yr) 17% (5 Yr)*
  • Invesco India Growth Fund – 24.4% (1 Yr) 10.8% (3 Yr) 18.6% (5 Yr)*
  • Mirae Asset India Opportunities Fund – 21.4% (1 Yr) 12.7% (3 Yr) 20.9% (5 Yr)*

*as on February 26, 2018

Mid Cap Funds

Mid-cap funds form the middle of the pyramid when shares are classified on the basis of market capitalization. The shares forming part of mid-cap funds have a market capitalization of INR 500 – INR 10,000 crores. The returns generated by these companies are generally higher than large-cap companies and they have the potential to grow and form part of large-cap funds. People can choose to invest some portion of their savings money in mid-cap funds. However, the risk-appetite of these schemes is higher than large-cap funds. Even the investment tenure in case of large-cap funds need to be higher. Some of the best schemes under the mid-cap category that you can choose to invest are:

  • Aditya Birla Sun Life Small & Midcap Fund – 29.1% (1 Yr) 19.9% (3 Yr) 27.4% (5 Yr)
  • L&T Midcap Fund – 28.6% (1 Yr) 21.2% (3 Yr) 24.5% (5 Yr)
  • Sundaram Select Midcap Fund – 18.8% (1 Yr) 15.4% (3 Yr) 26.4% (5 Yr)

*as on February 26, 2018

Small Cap Funds

Small-cap funds are the schemes that invest in shares of small-cap companies. These schemes form the bottom of the pyramid when comparing companies on the basis of market capitalization. These schemes help people diversify their portfolio and are priced lower than large and mid-cap funds. Though these schemes give good returns yet their risk-appetite is also high. Therefore, individuals should bear the risk appetite to earn higher returns. Some of the best schemes in small-cap funds are:

  • Invesco India Mid N Small Cap Fund – 21.4% (1 Yr) 10.9% (3 Yr) 23.9% (5 Yr)
  • Reliance Mid & Small Cap Fund – 21.8% (1 Yr) 12.8% (3 Yr) 25.2% (5 Yr)
  • Edelweiss Mid and Small Cap Fund – 32.5% (1 Yr) 15% (3 Yr) 27.2% (5 Yr)

*as on February 26, 2018.

Diversified Funds

These schemes invest in shares of companies across varying market capitalization. These schemes look for the possible opportunities that are available across sectors, market capitalization and invest in shares of those companies. Diversified funds are a good option for long-term investment and have fetched good returns in many instances. Some of the best diversified schemes that can be chosen for investment include:

  • Principal Emerging Bluechip Fund – 27.1% (1 Yr) 17.7% (3 Yr) 27.9% (5 Yr)
  • Tata Retirement Savings Fund-Progressive – 26.7% (1 Yr) 14.3% (3 Yr) 20.3% (5 Yr)
  • Tata Equity PE Fund – 26.7% (1 Yr) 15.8% (3 Yr) 24% (5 Yr)

*as on February 26, 2018.

Thus, from the above, it can be said that there are a number of schemes that you can choose to invest. However, before investing in any of these schemes you need to answer a few questions related to:

  1. The objective of the investment
  2. The tenure of investment
  3. The Expected returns on the investment
  4. The risk-appetite on the investment

Answering these questions will help you choose the type of scheme that suits your requirements and how your portfolio will appear. It will also help you to ensure to understand the modalities of the scheme completely and if required, you can consult a financial advisor. This way you can ensure that your objective is accomplished in a hassle-free manner.

Keep Calm & Enjoy Investing!

To invest in Mutual Fund, visit www.fincash.com

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Equity Funds

Disclaimer: The writer is the Co-Founder- Fincash.com, the views expressed here are personal in nature. Mutual Fund investments are subject to market risk. Please read the offer document carefully before investing.

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Harsh Jain

Harsh Jain, Registered Mutual Fund advisor, Co-Founder Groww

Répondu il y a 72w · L'auteur dispose de réponses 198 et de vues de réponses 582.8k

Il ya trois broad categories of Mutual Funds -

  • Equity - The mutual fund invests in stocks of select companies with certain strategy. The objective is to get highest return in long term.
  • Debt - The mutual fund invests mostly in government and corporate bonds. The objective is to get returns, in short term, with very low risk.
  • Hybrid -The mutual fund invests 65–70% of the money in equity and rest in debt. The objective is to get moderate returns with moderate risk.

The best broad category of Mutual Funds to do SIP in, as you have already picked, is Equity Mutual Funds.

Equity Mutual Funds Categories

Amongst Equity Mutual Funds there are few categories based on the investment strategy of the Mutual Fund. The choice of category depends on the risk appetite and investment time.

Which SIP mutual fund category is best to start investing with?

  • Large Cap - Most of the investments are in the companies that have very high market capitalization (market size). These are also called bluechip companies. Although every fund house has a different definition of what is a Large Cap, but if you arrange all the public traded companies in India in descending order of their market size, the top 100 or so will be considered Large Cap. These are the least risky amongst the Equity Mutual Funds because of the sheer size of the companies.
  • Mid Cap or Small Cap - Such funds invest mostly in small or mid sized companies. Again there is no unanimous definition for the Mid or Small cap, but leaving out the Large Cap companies others can be categories as Mid, Small or Micro based on their sizes. These mutual funds bear relatives higher risk and therefore gives higher returns in long term. E.g.
  • Multi Cap - These funds invest across all sizes of the companies. Most of these funds try to identify high potential companies that are available for low share price. These are good if you don’t want to start with large sum. You can find Multi Cap funds that accept as low as Rs 500/month.

Best Funds to start investing

To start, you should invest in a portfolio of one top fund from each category. Take this Portfolio for e.g.

High Growth SIPs for Long Term - Diversified portfolio for Start Investing.

Which SIP mutual fund category is best to start investing with?

This Portfolio has Mutual Funds from each category. This way, you can diversify your investments, learn about all categories and in future, invest more in the category that suits your risk-returns expectations.

How to start SIP?

  • Signup and complete onboarding on registered Mutual Fund platform - Groww. The process is 100% paperless. You can continue to get advice for future investments.
  • Select the mutual fund portfolio that you want to invest in (according to the risk, term and returns)
  • Just make online payment once and set it for auto-debit for next month onwards.

Hope it helps.

Anand Suman Srivastava

Anand Suman Srivastava, I am a disciplined investor

Répondu il y a 118w · L'auteur dispose de réponses 133 et de vues de réponses 282.8k

A lot of buzz going into market about SIP. SIP are similar to the Recurring Deposit plans by bank in term of deposit interval. You can choose the investment amount and investment frequency as per your convenience. It may be monthly or quarterly. You can start with very small amount staring 500INR. There are two types of SIP available in the market:

1. Close Ended Fund

2. Open Ended or Perpetual SIP

In close ended SIP you choose a investment horizon for a particular time period while open ended funds provides you flexibility of investing as per your choice. You can take this option and exit at any time as per your convenience. There will be some exit load as notified by Asset Management Company. Currently it is 1% for most of the companies. Means if you are exiting below 1 year you will get 1% less profit what is showing by the plan.

Be ready while investing in equity mutual fund you are supplying your money to stock market. The great thing in mutual fund is that they invest your money in various sector simultaneously. Means if you are depositing 1000 per month in mutual fund you are investing small small part in many companies. This reduces the risk level to very low. Because all the sector will not perform bad at the same time One more term is here worth notable the size of fund plan. You will hear the terms Large cap fund, Mid Cap fund, Micro Cap fund, Sectoral based fund etc. Large cap fund are those which invests a major portion of their fund in large companies while mid and micro cap fund will invest in relatively smaller companies. Sectoral fund will not have a diversified sector rather they will invest in only one sector. For example if you are choosing SIP in XYZ pharma plan you will find that this plan is investing all the money in pharma sector companies like Lupin, Dr Reddy, Cipla etc.

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So coming to the main question whom to start with? I will suggest to start with large cap fund for medium profit(normally 10-15%). If you are RISC apetite then you can choose Mid and Micro cap fund( normally 25-50% return). I will suggest to deposit your saving in 80% equity mutual fund and 20% fixed income source( RD, FD etc). If you are choosing SIP, I will suggest you to choose as many AMC as possible. AMC means Asset Management Company like ICICI MF, HDFC MF, Axis MF, SBI MF etc and choose as many dates and as many plans as possible. For example if you have 10000 to invest in Equity SIP choose atleast 3 AMC like SBI, ICICI and Axis. Now you have planned you will invest 4000 in SBI Mf, 3000 in Axis Mf and 3000 in ICICI Mf. Now choose 4 plans of each 1000 in SBI, 3 plans of each in Axis and 3000 in ICICI. Now choose dates for individual plan as 5, 10, 15, 20, 25 and 30. This will reduce your fear of stock market crash and increase on a particular date.


ADVISORKHOJ, We write about personal finance and Mutual Funds.

Répondu il y a 139w · L'auteur dispose de réponses 551 et de vues de réponses 403.2k

It is great that you wish to start Mutual Fund investments. Depending on the amount you wish to invest, try for a mix of categories rather than just one category, if possible.

Large cap funds usually consists of equities of the companies that have large capitalization and drive the economy. As a category, it is very stable and does not fluctuate in good and bad times. Returns are almost consistent. Hence, if you are an investor who has a moderate risk appetite then this must be the one for you. This is one of the stable categories of Equity Mutual Funds. Equity Funds Large Cap this is a list of all the leading large cap funds.

Mid and Small cap funds are suitable for moderate to high risk takers. If you are planning to stay invested for a long period of time then this is a great category. The past performance of the category has been exceptionally well especially the Mid cap category. Small cap category when mixed with Mid cap forms Small & Mid cap and it helps to deal with the volatility associated with Small cap. Equity Funds Mid Cap, Equity Funds Small Cap these links will tell you the performances of these categories.

Multicap is a mix of Large cap and Mid cap and the combination is an excellent one. It allows you to get the high returns of Mid cap and stability of large cap. No matter which category you might pick the markets at a low now and this is the best time to invest. Markets follow the cyclical movement of lows and highs. If you invest in a low you will able to make the most of the upcoming highs. Hope this helps!

Priyanka Chakrabarty


Prakarsh Gagdani

Prakarsh Gagdani, Around 15 years of Capital market experience including Mutual Funds

Répondu il y a 113w · L'auteur dispose de réponses 1.1k et de vues de réponses 1.2m

SIP or Systematic Investment Plan is the safest way to invest in equity markets through mutual funds. It is in other words, is a disciplined investment method through which an investor pays a pre- decided amount of money to a designated mutual fund/or funds.

SIP in stocks is an extremely useful method that allows you to invest a certain amount of money in a set of stocks or exchange-traded funds at regular intervals (Weekly, forthrightly or monthly). SIP helps one stay invested consistently and beat market volatility.

Benefits Of SIP:

Disciplined Investment

No Lump-Sum Investment

Need Not Time The Markets

Lessens Time On Research As Selected Mutual Funds Do It For You

There are two categories of SIP available in the market:

A). Close Ended Fund

B). Open Ended or Perpetual SIP

Both the categories are considered good for all kinds of investors, but holding your investment in open ended funds allows you to take your money out the nest anytime you want to. Investing in closed ended mutual funds and tax saving (ELSS) mutual fund schemes cannot exit as they have a lock-in period of 3-5 years.

But then, when an investor chooses to take out his/her eggs out of the nest before a year of date (this is variable and is decide by AMC) of investment there may be a exit load levied by the AMC which may eat up a significant portion of your investment capital.

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There are several banks and non-bank entities that run mutual fund businesses, they are Asset Management Companies. Some of them are SBI, Canara bank, IDBI, Axis Bank Mutual funds. Reliance, Aditya Birla, HDFC MF, etc.

Swati Aggarwal

Swati Aggarwal, Investor. Worked at a top tier investment bank for 5 years.

Répondu il y a 139w · L'auteur dispose de réponses 86 et de vues de réponses 169.8k

Salut Aniket,

The first thing to understand is that equities from different cap brackets (large, mid and small) are highly correlated. What that means in simple terms, is that if large cap equities are up then you are very likely to find that mid cap and small cap equities are also up. And if large cap equities are down then mid cap and small cap equities will also be down except on rare occasions.

Where cap matters, is that smaller cap equities generally have beta of >1 to larger cap equities i.e. if large cap equities move by a certain amount x, then mid cap equities will move by >1*x and small cap equities by even more than that. If we are in a period when equities are going well (say a good growth period) then small cap equities will do better than mid cap which will do better than large cap. During sell-offs the opposite will be the case. Large cap down by least followed by mid and then small.

So smaller cap equities promise greater returns with greater risk. Multi-cap funds will lie somewhere in the middle based on the cap composition. Based on only the information that you have provided in your question, since you are fairly young, it seems like a good idea to invest in an equity-heavy portfolio and also have some investment in mid and small cap equities. Hence you can consider multi cap funds.

If you are looking for fund recommendations, you can check our top picks in each of these categories:https://orowealth.com/#/screener These are funds which we expect to outperform category average. However please exercise your own discretion also.

It is also important to be aware of the direct plans of mutual funds. You can read more about these here:https://orowealth.com/#/blog#blo... Buying direct plans is a sure-shot way of increasing your returns over regular plans.

Shraddha Tiwari

Shraddha Tiwari, Investing in stocks since 2 years

Répondu il y a 9w · L'auteur dispose de réponses 122 et de vues de réponses 221.8k

Here are the Top 5 Mutual Fund Categories to invest :

Which SIP mutual fund category is best to start investing with?

  • Large-Cap Mutual Funds
  • Small-Cap Mutual Funds
  • Multi-Cap Mutual Funds
  • ELSS Mutual Funds
  • Aggressive Hybrid Mutual Funds

If you want know :

  1. Which Are the Best Categories for Wealth Creation?
  2. How Are They Different from Each Other?
  3. Which Category Is for You?
  4. What Should You Avoid While Investing?
  5. Top Funds from Each Category

Then visit at https://bit.ly/2BaQNRv

Anil Rego

Anil Rego, More than 20 years in same business and runing company Right Horizons.

Répondu il y a 138w · L'auteur dispose de réponses 166 et de vues de réponses 194.2k

Since you are beginning with your investments, we would suggest to start investing in a combination of Large and Midcap funds. However, these should also depend on the funds invested, you can add on Balanced Funds to your portfolio too. Here are few funds which can be considered for the purpose of investments

Large Cap

1. ICICI Pru Focussed Bluechip Fund – Gr

2. BSL Frontline Equity Fund – Gr

Mid Cap

1. Franklin Indian Smaller Companies Fund – Gr

2. HDFC Midcap Opportunities Fund - Gr

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