I would like to invest 10,000/- per month for 12 years in mutual fund. What type of mutual fund be suitable to give me maximum amount?
Ans: For a 12-year investment horizon, you have the advantage of time to benefit from the power of compounding. To maximize your returns, you might consider investing in equity mutual funds, which historically have the potential to offer higher returns compared to debt or hybrid funds over the long term.
Large Cap Funds: These funds invest in well-established companies with a track record of stable earnings. They offer relatively lower risk compared to mid and small-cap funds and can be suitable for investors with a moderate risk appetite.
Multi-Cap Funds: These funds invest across large, mid, and small-cap stocks, providing diversification benefits. They can adapt to different market conditions, making them suitable for long-term investments.
Equity Linked Savings Scheme (ELSS): ELSS funds offer tax benefits under Section 80C of the Income Tax Act, along with the potential for higher returns. They have a lock-in period of 3 years, aligning with your 12-year investment horizon.
Flexi-Cap Funds: These funds offer flexibility to invest across market capitalizations based on market conditions, providing the fund manager with the flexibility to capitalize on opportunities across market segments.
Remember, while equity funds have the potential for higher returns, they also come with higher volatility. Ensure your investment aligns with your risk tolerance. It's essential to consult with a financial advisor to select funds that align with your financial goals, risk profile, and investment horizon. Regularly reviewing your investments and staying invested for the long term can help you achieve your financial goals.
