Rs 10,000 and big dreams: Building wealth with mutual funds at 25

A 25-year-old's guide to long-term investing with mutual funds.

Hi, my name is Ashok. I'm a 25-year-old corporate professional looking to invest Rs 10,000 per month in mutual funds for the long term. Could you recommend some mutual funds that align with my risk profile and investment goals? 

At 25, you are making a wise decision by contemplating long-term investments. With a 25-year horizon, you have enough time to ride out market changes and potentially accumulate large wealth through mutual funds. However, with so many alternatives available, selecting the correct funds may be difficult. 

This article will walk you through the process while considering your age, investing objectives, and risk tolerance in mind.

As a young investor with a long time horizon, you can often bear a higher amount of risk. This means you can select funds that invest in equities, which have the potential for bigger returns but are also more volatile in the near term.

HSBC Multi Cap Fund: This multi-cap fund is an open-ended equity scheme that invests in large-cap, mid-cap, and small-cap stocks, aiming to create wealth over long-term periods, with a very high risk for the principal. The fund has given a 62.49 per cent return in the last one year. The fund clocks a healthy size of around Rs 2,669.86 crore. The fund's asset allocation consists of Large Cap Investments at 26.54 per cent, Mid Cap Investments at 22.54 per cent, and Small Cap Investments at 32.97 per cent.

Quant Flexi Cap Fund: The scheme aims to achieve consistent returns by investing in a portfolio of large-cap, mid-cap, and small-cap companies using a quantamental approach that surpasses factor-based, smart beta, or algorithmic strategies. The fund has given a 62.55 per cent return in the last one year. The fund clocks in at a healthy size of around Rs 4,616.85 crore.

Bandhan Small Cap Fund: Small cap mutual funds invest in diversified stocks of small companies, focusing on long-term potential returns. Despite market volatility, these high-risk investments offer significant potential for high returns. They diversify investor portfolios, investing in companies from different sectors and showcasing higher growth and operational scale compared to mid-cap and large-cap companies. The fund has given a 77.49 per cent return in the last one year. The fund clocks in at a healthy size of around Rs 4,384.90 crore.

Quant Mid Cap Fund: The scheme aims to generate capital appreciation and provide long-term growth opportunities by investing in a portfolio of mid-cap companies, offering flexibility to invest across all securities in debt and money markets. The fund has given a 71.35 per cent return in the last one year. The fund clocks in at a healthy size of around Rs 5,873.25 crore.

This list includes various mutual funds as prospective investment possibilities. These funds seek high returns, but it is crucial to note that larger rewards frequently come with more risk. Before investing, think about your risk tolerance and understand each fund's individual investment plan.

Disclaimer: The article is for informational purposes only and not investment advice.