Investment Plan for 2025: How to Select Between Index, Smallcap and Global Funds?
Investors who want to invest in small-cap funds or international funds that provide the highest return in 2024. Mutual fund advisors suggest that investors should start investing within a seven-ten-year investment period by choosing an alliance of Flexicar funds, index funds, and international funds through the SIP/STP plan in 2025.
The top three performing equity mutual funds were international funds. Mirae Asset NYSE FANG+ETF FoF and Mirae Asset S&P 500 Top 50 ETF FoF delivered 88% and 66% returns, respectively, in 2024. Motilal Oswal Nasdaq 100 FOF delivered a 58% return during the same period.
How Index Funds and ETFs Performed in 2024?
An index fund is a type of mutual fund or exchange-traded fund (ETF) that focuses on matching the performance of a specific market index. In index funds and ETFs, Motilal Oswal BSE Healthcare ETF delivered up to 41% this year. CPSE ETF and Mirae Asset S&P 500 Top 50 ETF offered 37.80% and 37.01% returns, respectively, during the same time. SBI Nifty Next 50 ETF and HDFC NIFTY Next 50 ETF show returns of 35.88% and 35.80% respectively in the year 2024.
How Smallcap Funds Performed in 2024?
Small-cap funds are a type of mutual fund that invests in small-size companies. Motilal Oswal Small Cap Fund delivered the highest return of all small-cap funds at the same time. Bandhan Small Cap Fund offered a 43.17% return in 2024. LIC MF Small Cap Fund delivered 40.54%, followed by Invesco India Small Cap Fund, which delivered 37.51% during this year.
How Mid-Cap Funds Performed in 2024?
These funds are a type of mutual fund that invests in the stock of mid-sized companies. Of all the mid-cap funds, the Motilal Oswal Midcap Fund delivered the highest return of up to 55% this year. Invesco India Midcap Fund delivered a 43.20% return during the same period. HSBC Midcap Fund delivered a return of up to 38.82% this year.
Vishal Dhawan, CEO, of Plan Ahead Wealth Advisors, a wealth management firm in Mumbai, suggests, “Investors in equity funds should invest with a seven-ten year investment horizon using a combination of flexicap funds, index funds, and international funds through a SIP/STP strategy. They should be prepared for significant volatility on the back of both an earnings slowdown and global events.”
He further added, “With these funds delivering this performance, Vishal Dhawan advises that investors should not go by the past performance of mid and small-cap funds and should be cautious of the valuations. Further, it will be a good idea to allocate 80% in domestic mutual funds and 20% in international funds.”
