Sir tell me the names of best mutual funds to invest in 2020? This is one question which keeps coming to me every day, week, month and year. All the investors are human beings, and no wonder each one of us would like to invest in the best returns giving mutual fund and shares. Below are two crucial information on the mutual fund industry in India as on 31-March-2020.
The size of the Indian Mutual Fund industry in India is approximately Rs.25 Lakh crores and has seen a massive three-fold increase in the last ten years. There are almost four dozen fund houses in India offering nearly 2500+ schemes to choose from to invest.
India has a population of almost 130 crores. In western markets, we can easily see nearly 50% and above population investing in markets directly and indirectly. In India, we still hover around 3%, which is too small a number. Hence Rs.25 Lakh crore is nothing.
Though the question: which are the best mutual funds to invest in 2020? does not have any particular answer, you should congratulate yourself for considering to invest in mutual funds. Believe me; you are interested in mutual funds else you would not have read till here. Having come till here, please continue reading, we at Vridhi Money will surely attempt to do some justice and will keep writing more info for investors like you even in future.
So why did we say that there is no one answer to the question on best mutual funds? More than a decade back, there was a real estate boom; during that time, all the focus was on real estate and the connected industry. Then the sector collapsed to recover a bit after many years and is in trouble again today due to the Corona Virus pandemic.
The next bull cycle was in the power sector, and the famous Reliance Power IPO got subscribed a mad number of times. There were many NFO’s too in the Mutual Fund Industry, focusing on the theme of Power and Energy. At that time, investing in power funds were the best but then what happened on the turn of the cycle? The best funds became the worst-performing funds.
In recent years the pharma sector has seen the worst performance until three months back. For over five years, the industry was doing bad. We at Vridhi had advised some of the clients who agreed to invest in the pharma fund. Some investors can understand our reasonings when we explain but imagine recommending a pharma fund to a person who is asking for the best mutual fund? After hearing the name the first thing he would do is look into the past performance of the fund and… yes you got it, he will not invest. They were not the best fund at that point of time, but in last 3 to 4 months they have been among the best.
All those who were behind the financials until last year will not touch them today since the whole sector is bleeding. How many of you will dare to invest in the real estate today? Tell anyone to invest in gold, and they would happily do it since the gold is at all-time highs. Now you know why so much craze is seen right now on the Gold Sovereign Bonds.
So what are we stressing here? There are no best mutual funds to invest. Investing in mutual funds itself is the best idea and start the process soon. The younger you are the more compounding you achieve. Hence, seek the advice of a Mutual Fund Distributor like Vridhi Money or anyone you like. He probably knows better than us.
The next major trap most investors fall into is a fund to fund comparisons. To a large extent, an advisor will help you choose the right funds. The biggest mistake we do is asking ABC fund has delivered 9.1% while XYZ has given only 8.8% so shall we shift funds from XYZ to ABC?
Keep in mind, in a category if there are 10 top funds, each fund might find itself a place in the top 3 by rotation. It’s simple, if the fund has significant weightage on pharma and the sector moves, the fund will also move up and when pharma underperforms, and PSU’s move the funds holding more of public sector units will move to the top. None of these matters when you are investing for nest 10-15-20 years. The movements get averaged out. You advisor may be able to get you better returns over a long period. Sadly most people lose patience even before one cycle gets completed—no wonder the markets are seen as a pace of speculation by many.
VRIDHI Money provides complete advisory on investing in Mutual Funds. We will be happy to serve you as your Investment Advisers. Do contact us by Clicking Here and also do follow us on the below social media channels.