3 Best mutual funds for next 10-20 years | Best Mutual Fund for SIP in India

Hi everyone, one question I keep getting is Syle, can you tell us which are the

best

mutual

fund

s for long term investments? So in this video I will tell you the three

best

mutual

fund

s for the

next

10 to 20

years

. This video would be helpful for both of you. existing reach of investors as well as new investors, but before we get to that, I want to highlight the two weakest points of every mutual fund investor, which is why I keep getting the question that the mutual funds I have invested in do not They are performing well, should they? change and if so, where should I change?

So the second problem is that there are many categories of mutual funds. How many mutual funds should I have in my portfolio? So in this video I will solve all the confusion about investing in mutual funds, not just for the

next

one. year, but for the rest of your life I have divided this video into three parts, first I will discuss weaknesses 1 and 10.2 and finally I will conclude with the best mutual fund. Okay, let's start now. Most retail investors invest in mutual funds based on last one to three

years

of performance, so they chose the mutual fund that generated the highest return in the last one to three years, but the problem with this approach is that There is no guarantee that if a mutual fund has generated the highest return in the past, it will continue to generate the highest return in the future, so what happens is that after investing in mutual funds based on past performance in a couple of years , most retail investors realize that their mutual fund is no longer the best-performing mutual fund;

In fact, in many cases, the best mutual fund. The fund in the past underperforms and retail investors think of selling those mutual funds and buying funds that are performing well during that time, but there is no guarantee that after selling their mutual funds, the new fund they will invest in will end up giving. High yield, so you will face the same issue of selling the fund and buying the new fund each time in this process most investors would end up generating even lower returns than the market. I'll give you an example a few years ago which was the excess of Blue Chip. the best performing mutual fund and all the retail investors wanted to invest in the Bluetooth access fund, as a result it saw huge investment and ended up being the number one active feature fund in the large cap category with an area of ​​36.87 billion rupees;

However, in the last year it is the worst performing mutual fund in the large cap category, ranking 29 out of 29. In two years it is ranked 27 out of 27. In three years it is ranked 23 out of 26 and most of investors in Bluetooth access funds are confused about what Should they stop investing in this fund and switch to another fund or continue their sip? By the way, I've already created an in-depth video on why the Access Bluetooth fund underperforms. Additionally, there is another currently popular Point Flexi Cap fund. the third largest mutual fund in the soft cap category and again has the same history as Access Blue Chip.

At one point this fund was the best performing fund, but in the last year this fund was ranked 26th out of 28. So the moral of the story is that there is no fund that consistently remains among the best performing funds. performance for a long time and that most retail investors invest money in equity mutual funds with long-term goals, it means that there is a high probability that the fund you are currently investing your money in will end up as underperforming, have Keep in mind that we are talking about active mutual funds here and if you have been following the mutual fund industry, you will know that lately it is becoming very difficult for active mutual funds to outperform the index.

There was a recent study that said 60 percent of top active funds underperformed the benchmark over a long-term period, so forget about generating higher returns. Most investors in active mutual funds end up underperforming the benchmark in the long run, so the best solution to this problem is index funds now. I've discussed why index funds are better than active mutual funds several times in the past, so I don't want to go into details. You can watch my previous videos now which is the best index fund to invest in. Just wait for now. I will discuss the second weak point and then, by the way, I will tell you which is the best index fund.

Now you can also listen and watch my podcast on Spotify for free. Now the name of the podcast is personal finance 101 with sahil bhadvia, in case you are interested, I have given you the link below now there are many subcategories within equity mutual funds, it has large cap, mid cap, flexible small cap, etc., and each category has many mutual fund options, so how to create a mutual fund portfolio if you have to add all the categories and how many funds? If you have within each sub-category, some people also ask that since they have a long-term financial goal, they can also take more risk, so they should invest more in mid-cap and small-cap indices.

I did some research and compared four large mid cap indices. cap small cap and flexi cap which is a combination of large, mid and small cap which is essentially your Nifty 500. In case you have no idea about various indices and how mutual funds actually work, I would highly recommend my course on the I have covered all aspect of mutual funds along with fundamental stock analysis and personal finance foundation. Okay, let me show you the results of my analysis, so this is the nifty 500 data that is available since November 2006. Since then, the index has generated a return of 393 percent for in the same period, the return of Nifty fifty is 381 per cent, sensex return is 356 per cent, BSC mid cap index return is 355 per cent and NSE small cap return is 351 per cent, if I summarize from November of 2006, sensex has generated a return of 356 percent, Nifty returns of 381 percent of Nifty. five hundred returns are 393 BSC mid cap returns are 355 per cent and BSE small cap returns are 351 per cent.

These are very interesting data. Many people have the misconception that mid and small cap companies generate much higher returns than the large cap index, but the data. suggests that there is not much difference in long term performance, yes in short term there may be a difference but not in long term, the simple reason is that mid cap and small cap funds are more volatile so during Bull Run they jump a lot. and during the bear market they fall a lot, for example during the subsequent covert bull run, while Nifty jumped 126 percent, the mid cap index jumped higher with a return of 161 percent and the small cap index jumped higher high with a return of 228 percent, but the same small cap index stagnated at 52.7 during January 18. as of March 20, while Nifty's performance in the same period fell to 25.8 percent, so the last 10 and 15 years of data clearly suggest that there is not a big difference in returns between the large index cap, mid cap and small cap over the long term, yes there may be a marked difference at the individual stock level, but at least not at the index level.

Now let's see which is the best mutual fund for the next 10 to 20 years, based on our analysis we have concluded two points: First, no active mutual fund continues to outperform on a consistent basis and if you invest in an active mutual fund, you will always You will face the dilemma of switching funds, therefore, the best mutual fund to invest in is a low-cost index fund where you don't have to worry about selecting the best fund you get. similar to the market and the second data suggests that in the long run there is not much difference in the performance of various indices in its category of large cap, mid cap and small cap, so the best option is to go for a nifty index fund based on 50 where you will be able to invest in the top 50 companies in the country with the exact same allocation according to their weighting and this index itself is dynamic, where a low performing fund would leave the index and a better performing fund would enter the index, so the index itself will take care of So, rebalancing the first mutual fund in your portfolio should be an index fund based on nifty 50.

Now, within nifty 50, there are multiple index funds, so how do you differentiate them? Basically, there are two parameters to preselect the index fund expense ratio and tracking error to reduce the expense ratio. the better it is and it reduces the tracking error the better, again. I am not going to go into details about expense ratio and tracking error as I have already covered it in my previous videos, so go for Index Fund with low expense ratio and low tracking error though, please. Understand that since index funds simply replicate the index, there will not be much difference in the returns of index funds, so just go for any index fund from a reputed fund house which by the way will be your mutual fund number one if you will. some exposure in next 50 companies then you can also consider Nifty next 50 Index Fund but now it is optional.

The problem with the nifty 50 Index Fund is that it only includes the top 50 companies. What if you want exposure to mid- or small-cap companies, ideally? There should be an index fund that replicates the top 500 companies in India and invests in large and midcap companies, but the problem is that some of the midcap and especially smallcap stocks are still cash-strapped, so , index funds for mid cap The cap, small cap and flexi cab categories are still not popular in India and that is where if you want to have exposure in mid cap and small cap it is better to go for an active mutual fund in this category Now, you'll sometimes find more large caps. attractive sometimes mid cap and sometimes small cap, so it is very confusing about where to invest and how many Witcher funds to have in the portfolio, that is where I would recommend investing in a flexible cap category where the fund manager would invest in all of its mid-cap and large-cap. and the small cap category based on market sentiment and valuation within flex cap, one of my favorite options is fun as it also gives you some exposure to US based funds, although currently funds Indian mutuals cannot invest in the US stock market as they violated the 7 billion cyber limit and this limit is yet to be revised.

Hopefully, this limit will be reviewed soon. I know this fund has underperformed, but that's mainly because it had exposure to US stocks and they fell a lot, but over the long term. is a great pick so the second stock you can consider is the fund, currently it has an expense ratio of 0.76 per cent, the fund size is Rs 27,712 crore and it has an exposure of 88.4 percent in stocks and within that it has an exposure of 71.9 percent in Indian stocks and 16.49 percent in foreign stocks within Indian stocks, it has a burst of 58.8 percent in large companies, 3.4 percent and mid-caps and 8.9 percent in small companies.

Please note, don't limit yourself to past performances, over the long term this fund should perform very well and third. The fund would also be in the Flexi Cap category. I would prefer overflow Flexi Cab or Coated Flexi Cab or HDFC Flexi Cap. All three fund houses have an established track record in the rapid and you can choose any of them, so if I conclude the three best mutuals. The fund includes the number one index fund nifty 50 and could be from any of the fund houses including UTI SBI kotak sdfc surplus Navi Etc. Since they all replicate the same index, there will not be a big difference in performance next to the fund that You can choose. from the flexicap category where the fund manager himself decides the allocation between large cap, mid cap and small cap based on the market conditions, so my second choice would be flexi Cap Fund and the third choice would be excess flexi cap, quarter flexi cab or HDFC flexi cap, any of them.

With this, you will be sorted with your mutual fund investing for the next 10 to 20 years, but keep in mind that this is not advice. Be sure to make your ownDo your research before investing your money and if you find this video useful please share it with your friends see you in the next video until then take care