5 best mutual funds for salaried individuals| North Loop Official Blog
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27 Oct 2020

5 best mutual funds for salaried individuals

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Salaried Individuals, who earn money on a monthly basis, may find it very difficult to keep a lumpsum amount of cash ready at the time of financial emergencies. As one grows older, the financial responsibilities keep increasing, and banking on just one’s salary may not be enough.
It can be very difficult to manage expenses and save money without the element of investing involved, hence one may be on the lookout for investment avenues to multiply their money.
This article covers the five best mutual funds for salaried individuals, which can effectively help reduce an individual’s monthly outgo and minimize tax burdens while keeping the ultimate investment goal of maximizing returns intact.

Investments in the form of Systematic Investment Plans (SIP) on a monthly basis help fight inflation-based decrease in purchasing power and helps maximize returns while keeping liquidity too at a priority.

Why should one invest in Mutual Funds?

  • Helps achieve financial goals- Investing in mutual funds can be of benefit for individuals looking to expose themselves to a certain degree of risk in exchange for high returns. This in turn helps individuals achieve their financial goals.

  • Helps individuals save tax- Some mutual fund schemes like ELSS (Equity Linked Savings Schemes) helps individuals save tax under Sec 80C of the Income Tax Act. Across all tax saving schemes, ELSS has one of the shortest tenures of just 3 years as opposed to high tenure schemes like Public Provident Fund (PPF).

  • One of the best long-term investments- Mutual funds are regarded as one of the best long term investment instruments as longer tenures may reduce risk exposure, helps fight inflation, and provides one of the highest returns as compared to other investment tools.

  • Diversification of Portfolio- In contrast to other marketable securities, mutual funds benefit from diversification of portfolio across a concoction of various securities, which help spread risk and maximize returns.

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Best 5 mutual funds for Salaried Individuals-

Given below is a list of the best 5 mutual funds for salaried individuals-

Best performing mutual funds in last 5 years
NameAUM Size1 Year Returns3 Year Returns5 Year Returns
Mirae Asset Tax Saver FundRs. 4,270 crores9.16%8.5%NA
Parag Parikh Long Term Equity FundRs. 4798 Crores21.43%13.09%13.89%
Mirae Asset Emerging Bluechip FundRs. 11,466 Crores9.22%7.48%14.71%
Edelweiss Equity Savings FundRs. 75 crores8.06%7.38%7.98%
ICICI Prudential Asset Allocator Fund (FOF)Rs. 7964 Crores5.32%7.56%9.92%

1. Mirae Asset Tax Saver Fund- This is a type of Equity Linked Savings Scheme funds that help investors earn returns over a period of 3 years. This fund also helps investors save up to Rs. 1.5 Lakhs under section 80 C of the Income Tax Act, providing dual benefits to investors.
Mirae Asset Tax Saver Fund is among the best performing mutual funds under the ELSS category and this fund invests in companies that have a strong competitive advantage as well as good cash flows within their sectors. The investments are made majorly in large-cap stocks, followed by medium and small-cap stocks respectively and this diversification of portfolio can help investors maximize their returns.

2. Parag Parikh Long Term Equity Fund- This is a type of multi-cap mutual fund that invests in companies across various market caps and across different sectors. This fund is ideal for investors investing over a long period of time.
Parag Parikh Long Term Equity Fund is easily one of the Best performing mutual funds in last 5 years and it invests in Indian as well as international stocks, which help maximize returns. But the only downside of this portfolio is its high level of risk involved.

3. Mirae Asset Emerging Bluechip Fund- This is a type of mutual fund that invests in Blue Chip stocks (Top 200 Large and Medium-Cap stocks) which guarantee a mix of stable returns off of large-cap stocks and moderately high returns off of medium cap stocks. This fund is ideal for investors looking to invest in long-term funds and is one of the best mutual fund for 5 years.

4. Edelweiss Equity Savings Fund- This is a type of hybrid mutual fund that invests proportionately into stocks, FD like instruments, and risk-averse investment instruments. These funds offer slightly higher returns than fixed deposits, as a portion of these funds are invested in stocks. Being one of the best mutual funds to invest in for risk-averse investors, Edelweiss Equity Savings Fund is a popular option. The risk exposure is significantly lesser than other mutual fund choices as well.

ICICI Prudential Asset Allocator Fund (FOF)- This is a type of balanced hybrid mutual fund that invests money proportionately in stocks and Fixed Deposit instruments. However, the risk exposure can be relatively higher than Equity Savings Hybrid Mutual Funds. ICICI Prudential Asset Allocator Fund (FOF) is one of the best performing mutual funds in last 5 years and the fund allocates a majority of the money in Large-cap stocks, followed by medium and small-cap funds. The other portion of funds, apart from equity are invested primarily in debt securities.

Why not invest in carefully selected mutual funds offered by North Loop, offering round up investing and an automated set of rules and goals. Click here to know more about investing in mutual funds through North Loop.

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