What are Mutual Funds?
Total Value
₹9,403.19
+8.2%
Portfolio75%
Equity Funds
₹15,750
+12.4% SIP Investment
Monthly₹5,000
Total Investment₹60,000
Portfolio Budget
View All
65%
40%
It is an investment vehicle where multiple investors come together and pool their funds. This pooled money is then invested by the fund manager across various asset classes including equity, debt, gold, and other securities to generate returns. The gains and losses incurred from such investments are divided among investors in the proportion of the share of investment.
Advantages of Mutual Funds
Affordability
Start your investment journey with as little as ₹500. Mutual funds make investing accessible to everyone, regardless of their financial capacity.
Diversification
Spread your risk across multiple securities. A diversified portfolio helps minimize risk while maximizing potential returns.
Professional Management
Expert fund managers handle your investments, making informed decisions based on thorough research and market analysis.
Ways to Invest in Mutual Funds
SIP (Systematic Investment Plan)
SIP allows you to invest a fixed sum at regular intervals. SIP is one of the most recommended ways to invest in mutual fund schemes as it is convenient. It also helps you average out the cost at which you buy the units of these funds.
Lumpsum
When you make a one-time investment, it is called lumpsum. Lumpsum investments are generally done when people have got a big sum of money like bonuses or payments from a sale of an asset.
Types of Mutual Funds
Mutual funds in India are classified into different categories based on the asset class they invest in. Some popular categories are as follows.
Equity Mutual Funds
Equity funds invest a majority of their assets in stocks. These funds are classified into different categories based on the market cap of the stocks they invest in.
Large-Cap Funds
These funds invest at least 80% of their assets in the top 100 companies by market capitalization.
Mid-Cap Funds
These funds invest at least 65% of their assets in the next 150 (101st to 250th) companies ranked by market capitalization.
Small-Cap Funds
Such funds invest at least 65% of their assets in companies ranked 251 and above by market capitalization.
Multi-Cap Funds
These funds invest at least 25% of their assets in each of the large, mid, and small-cap stocks.
Top 5 Equity Mutual Funds
5Y Returns
(Annualized) %
(Annualized) %
Debt Mutual Funds
Debt funds generate returns by lending money to corporates and the government by buying their debt papers. These funds are classified into different categories based on their lending period and credit quality of the papers.
Money Market Funds
These funds generate returns by lending to companies or governments for up to 1 year.
Corporate Bond Funds
These funds earn returns by lending mostly (at least 80%) to companies with the highest-rated debt papers.
Overnight funds
These funds earn their returns by lending to companies or governments for one business day.
Liquid Funds
These funds generate their returns by lending to companies or governments for up to 91 days.
Top 5 Debt Mutual Funds
5Y Returns
(Annualized) %
(Annualized) %
Hybrid Mutual Funds
Hybrid funds invest in a mix of equity and debt instruments. These funds are ideal for investors who want to benefit from both equity growth and debt stability while managing risk.
Balanced Advantage Funds
These funds dynamically manage allocation between equity and debt based on market conditions to optimize returns.
Aggressive Hybrid Funds
These funds invest 65-80% in equity and the rest in debt instruments for growth with some stability.
Conservative Hybrid Funds
These funds invest 75-90% in debt instruments and 10-25% in equity for stable returns with some growth.
Multi-Asset Allocation
These funds invest across equity, debt, and gold to provide diversification across different asset classes.
Top 5 Hybrid Mutual Funds
5Y Returns
(Annualized) %
(Annualized) %
Mutual Fund Calculators and Tools
Use our financial calculators to plan your investments and track your returns
SIP Calculator
Calculate how much your monthly SIP investments can grow over time
Lumpsum Calculator
Calculate returns on your one-time investment
Returns Calculator
Calculate the returns on your mutual fund investments
Frequently Asked Questions
Get answers to common questions about mutual funds
A mutual fund is a type of investment vehicle that pools money from multiple investors to invest in various securities such as:
- Stocks (equity)
- Bonds (debt)
- Money market instruments
- Other securities
Professional fund managers handle these investments, making decisions based on the fund's objectives and market conditions.
Mutual funds are primarily classified into three main categories:
- Equity Mutual Funds:
Invest primarily in stocks. These can be further categorized into large-cap, mid-cap, small-cap, and multi-cap funds.
- Debt Mutual Funds:
Invest in fixed-income securities like government bonds, corporate bonds, and money market instruments.
- Hybrid Mutual Funds:
Invest in a mix of both equity and debt instruments to provide balanced returns.
You can start investing in mutual funds through these simple steps:
- Complete your KYC (Know Your Customer) verification
- Choose between SIP (Systematic Investment Plan) or lump sum investment
- Select suitable mutual funds based on your goals and risk appetite
- Invest through a registered mutual fund distributor or directly through AMC websites
The minimum investment amount varies by fund type and AMC:
- SIP investments can start from as low as ₹500 per month
- Lump sum investments typically start from ₹1,000
- Some funds may have higher minimum investment requirements
It's best to check the specific fund's documentation for exact requirements.
While all investments carry some risk, mutual funds are considered relatively safe because:
- They are regulated by SEBI (Securities and Exchange Board of India)
- Professional fund managers handle investments
- Investments are diversified across multiple securities
- Regular monitoring and reporting requirements ensure transparency
However, returns are not guaranteed and depend on market performance.