Top 5 Mutual Funds Every Young Professional Should Know About

Starting your investment journey early can give you a solid head start. As a young professional, you have one big advantage – time. Since you’re at the beginning of your career, you also have a higher risk tolerance. That means you can take slightly bolder investment decisions because you have the time to hedge against short-term market ups and downs. Mutual funds can be a smart way to grow your money steadily while balancing risk and return.

But with so many options out there, it’s easy to get confused. Here’s a quick look at the top five mutual funds in India that can be a good fit for young investors.

1. Franklin Build India Fund

This sectoral equity fund focuses on infrastructure and capital goods, making it ideal for long-term investors who want to participate in India’s growth story.

Why it works:
• Targeted investment in infrastructure sectors that benefit from economic growth
• Suitable for long-term capital appreciation
• Managed by a reputed fund house
• 3-year annualised return: 27.5%

A strong choice if you’re looking to grow your portfolio with sectoral opportunities.

2. Aditya Birla Sun Life Medium Term Plan

This fund aims for income generation and moderate capital appreciation through a mix of corporate debt and government securities.

Why it works:
• Balanced exposure to mid-term debt instruments
• Suitable for investors with moderate risk appetite
• Provides relatively stable returns
• 3-year annualised return: 14.36%

Great if you prefer debt exposure with lower volatility.

3. SBI Magnum Gilt Fund

This fund primarily invests in government securities and is ideal for risk-averse investors who want safety with stable returns.

Why it works:
• Focused investment in government bonds
• No credit risk involved
• Suitable for conservative investors
• 3-year annualised return: 7.83%

Perfect for those who want safety over high returns or want to invest in low-risk options to balance their portfolios.

4. Motilal Oswal Midcap 30 Fund

An equity fund that focuses on high-growth potential mid-cap companies across diverse sectors.

Why it works:
• Exposure to mid-cap growth stories
• Higher return potential over the long term
• Sector diversification with a focused approach
• 3-year annualised return: 28.83%

Ideal for young investors who can take higher risks for better returns.

5. ICICI Prudential Infrastructure Fund

This fund invests in infrastructure-related sectors like construction, energy and transportation. It aligns well with India’s economic development trends.

Why it works:
• Good sector-specific growth potential
• Strong performance in economic expansion phases
• Long-term wealth creation opportunity
• 3-year annualised return: 28.22%

A great pick if you want to ride the infrastructure boom in India.

These top 5 mutual fund options cover a wide range of investment goals and risk profiles. You can mix and match depending on your comfort level and financial goals.

How to choose the right fund?

Choosing the right fund doesn’t have to be complicated. So if you’re wondering which mutual fund is best to invest in? Think of it like finding the right fit for your lifestyle and goals. Here’s how you can go about it:

• Start with your goal: Ask yourself why you are investing. Is it for something you need in a couple of years or something big a few years down the line? Your goal decides how long you should stay invested and what kind of fund you need.

• Think about risk: Since you’re young, you can take a bit more risk compared to someone closer to retirement. A little risk now could mean higher returns later because you have time on your side to ride out market ups and downs.

• Check how the fund has done in the past: Past performance isn’t a guarantee, but it gives you a fair idea about how the fund behaves during good and bad market phases. It’s like checking a track record before you commit.

• Look at the expense ratio: This is just a small fee the fund charges to manage your money. The lower the expense ratio, the better it is for you. This is because more of your money stays invested and working for you.

• Read the fund’s objective: Every fund has a goal of its own. Some go for steady growth, some chase higher returns and others aim to balance things out. Make sure the fund’s objective matches your goal.

Mutual funds offer a smart way to build wealth gradually. As a young professional, time and better risk-taking capacity are on your side. Use that advantage. Choose the right mix of funds, stay invested and let your money grow.

Having said that, if you ever need quick funds, you don’t have to break your portfolio. You can opt for a Loan Against Mutual Funds from Fibe. Within 10 minutes, you can get funds up to ₹10 lakhs credited to your account. The best part is that you can complete the application process from the comfort of your home. So your money keeps working for you, and you still get the cash you need when required!

FAQ

1. How do I start investing in these top 5 mutual funds?

Getting started is simple.

• Choose a fund that matches your financial goal
• Sign up with a trusted mutual fund platform or mobile app
• Complete your KYC (Know Your Customer) process
• Decide the amount you want to invest
• Make your first investment

That’s all and you’re good to go.