Mutual Fund Investment advice to a beginner

I am trying to make my first investment in MF but I have no idea where should I start from? Would love to know what are some MFs that a beginner can invest on?

If you have 1000 to invest, I would put 100 in Nifty 50 Index Fund and 100 in Niftynext 50 Index Fund and keep investing as and when you get funds. Search for an AMC, who is reputed and who offers the cheapest as far as commission goes, at the same time, ensure that the AUM is higher. The remaining 800, I am sure experts here will advise you.

Disc: I am biased towards SBI AMC.

By MF you mean equity or debt?

I’d say put 60% in a Nifty 100 fund and 40% in a medium-term target maturity gilt fund.

Keep learning and changing the portfolio from there as you see fit. Start with a small amount but I think it’s important to dip your feet in the water.

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Anything that will better for me in the long term

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Debt and equity are different asset classes, they cannot be compared. If you don’t know about them, I suggest to know about them first.

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I read somewhere that it is better to split between Nifty 50 and Nifty next 50 instead of Nifty 100 because Nifty Next 50 acts like a midcap with higher volatality whilst Nifty 50 is more stable. I tried searching for the article but could not find.

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one of the source…

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That’s there.

If someone wants to combine with a Midcap index, then another option is the Edelweiss Nifty Large Midcap 250 Index fund. This fund has 50% allocation to Nifty 100 and 50% allocation to Midcap 150 index.

I read from your comment, that you are interested in long term, I would do,

  • Invest 40% in a Nifty 100 Index fund (e.g., Axis Nifty 100 index fund)
  • Invest remaining 60% in 2-3 active Multicap/Flexicap funds (e.g., Parag Parikh Flexicap, Kotak Multicap, Canara Flexicap, …)
  • Don’t invest in pure - mid, small cap (active/passive) funds. They are very volatile, low downside protection.

Disc: I am not a financial advisor, the funds i suggested are just examples. Also some people prefer to have some debt for long term investment. But my preference is for 8+ years portfolio, a 100% equity only portfolio is also fine


For a new investor for long term, create a simple portfolio:

  • A Nifty 50/Nifty 100 Index fund, do SIP regularly, whenever you feel market is down by 10%, add an extra lumpsum (Select any AMC of your choice, i don’t think much difference in returns. Prefer some fund with higher AUM like UTI NIFTY 50, ICICI NIFTY 50, AXIS NIFTY 100)

  • Add 2 Multicap funds (By design, it has 25% allocation to midcaps & 25% allocation to smallcaps)

Now you have 3 funds in your portfolio, Do SIP continuously for next 10 years, you can expect 9-10% returns (Keeping expectations low is always good)


Best advice

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My suggestion would be based on the assumption that you track market on daily basis.

Do sip in ETFs. Allocate your 50% of capital to ETF and 50% to MF.

ETF include… Niftybees, Bankbees, Goldbees, Silverbees, Midcap100, Infrabees, IT bees , Nifty Next50 bees, Pharma bees.

If you are active in the market, ETF are actively traded in the markrt, take advantage of volatility and place order at your price.

ETF have low cost and better control in terms of buying and selling.

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