SBI bank holds maximum number of saving accounts in India. SBI is trusted brand in India. SBI saving account to hold the money. SBI offers another instrument for investment, SBI mutual funds. In this blog, we would discuss top mutual funds in SBI to investment for wealth creation. Before start your investment in mutual funds, ask below question to select the best fund for you.
What is the financial goal for the fund?
Do you need money to buy a car in the next 2 years?
Do you need money for your marriage in next 5 years?
Do you need money to buy a house in 8 years?
Do you need money for your kids education in next 20 years?
Do you need money for my retirement in 30 years?
It is advisable to select invest in gold or debt mutual funds for short term financial goals for up to 2 years. In case your investment horizon for more than 3 years, you can start investing in equity mutual funds.
INVESTMENT HORIZON AND FUND TYPE:
1-2 years Investment Horizon: Invest in Debt Mutual Fund.
3-5 years Investment Horizon: Invest in Hybrid Fund / ELSS funds.
5-7 years Investment Horizon: Invest in Large Cap Fund/Nifty Index funds.
More than 7 years time horizon: Invest in Small & Mid Cap Fund
More than 10 years time horizon : Sector and Focused funds.
For Retirement/Kids education : Nifty Index funds
SBI Equity Hybrid Direct(G) Mutual Fund:
This mutual fund invests in multiple asset classes. Expense ratio of the fund is 1.04%. The returns are higher than it peers in multi asset category. Fund has 72.56% investment in Indian stocks of which 49.71% is in large cap stocks, 10.82% is in mid cap stocks, 4.59% in small cap stocks.Fund has 22.53% investment in Debt of which 6.37% in Government securities, 12.71% in funds invested in very low risk securities. Minimum SIP for the fund is 500 rupees.
Expense Ratio : 1.04%
Minimum SIP : 500
Best for 3 -5 years investment
In case your goal is less than 5 years, you can invest in hybrid mutual funds. SBI equity hybrid direct growth mutual funds can be used for 3-5 years of investment.
SBI Nifty Index Fund:
SBI mutual funds offer Nifty index fund which is invested based on algorithm. So it would have low expense ratio. Expense ratio of the fund is 0.29%. The scheme will adopt a passive investment strategy. In case you have confusion in selecting best mutual funds for long term investment, select nifty index funds. It would align with nifty index on returns.
Expense Ratio : 0.29%
Minimum SIP : 500
Best for more than 7 years investment
Best for retirement planning.
In case your goal is more than 10 years, you can invest in Index mutual funds. SBI nifty mutual funds can be used for retirement planning and children’s higher education.
SBI Blue Chip Growth Direct Mutual fund:
This fund invests in large cap quality companies. It invests in ICICI, HDFC, ITC, Nestle, HCL and many more large cap companies for better returns. Expense ratio of the fund is 1.04%. Minimum SIP for the fund is 500 rupees. For financial goals for more than 5 years, we can start investing in blue chip growth direct mutual funds in SIP.
Expense Ratio : 1.04%
Minimum SIP : 500
Best for more than 5 years investment
It invests in Banks, Insurance, Software companies and Marketing companies. we can start with monthly 500 rupees in this fund for long term wealth creation.
SBI Small Cap Growth Direct Mutual Fund:
This fund invests in a well diversified basket of equity stocks of small cap companies. It invested in JK cements, Narayana Hrudayalaya Ltd, Hawkins Cookers Ltd and many more companies. Expense ratio of the fund is 0.93%. Minimum SIP is 500 rupees. It gives better than nifty index fund. It is rated as top fund in small cap category.
Expense Ratio : 0.93%
Minimum SIP : 500
Best for more than 7 years investment
We can start investing this fund to accumulate wealth to buy a home or buy a land. It can be started with minimum SIP of 500.
SBI Focused Equity Direct Growth Mutual Fund:
This fund invests in concentrated portfolio of equity and equity related securities. It invests in high growth quality companies to give better returns. It invests in HDFC bank, SBI, Axis bank, Muthoot Finance and many more. Expense ratio of the fund 0.87%. Minimum SIP of the fund is 500 rupees. It gives better returns than it competitors in Focused fund category.
Expense Ratio : 0.87%
Minimum SIP : 500
Best for more than 10 years investment
You can allocate 10% of your investment in focused equity fund to get higher returns. It has high risk in short term, you start investing on this fund only you invest horizon is more than 10 years.
SBI Technology Opportunities Direct mutual Fund:
It is sector fund. This fund invests in a diversified portfolio of equity and equity related securities in technology and technology related companies. It invests in Indian and US technologies companies such as TCS, HCL, Tech Mahindra, Alphabet Inc, Infosys and many more. It is aligned with returns of technologies companies. Expense ratio of this fund is 1.75%. It invests in US technology companies, so it expense ratio is higher than other funds.
Expense Ratio : 1.75%
Minimum SIP : 500
Best for more than 10 years investment
SBI Banking & Financial Services Growth Direct Plan:
It is sector fund. This fund invests in equity and equity related securities of companies engaged in banking and financial services. It invested in HDFC bank, ICICI bank, Axis bank, SBI and other banks,insurance companies. Expense ratio of the fund is 1.16%. Minimum SIP of the fund is 500. It is more volatile compare with large cap and blue chip funds. It invests only in financial institutions. So government policy changes or global economy would impact the fund. So invests in fund only if your investment goals is more than 10 years.
It is sector fund
Expense Ratio : 1.16%
Minimum SIP : 500
Best for more than 10 years investment
SBI Magnum Tax Gain Scheme Growth Direct ELSS fund:
It is tax saving fund by SBI fund house. Investment made in this fund under section 80 C of the Income-tax. Expense ratio of the fund is 1.4%. It is best for tax saving. Minimum SIP for the fund is 500 rupees. It holds banks, insurance, software companies and many more.
It is tax saving fund.
Expense Ratio : 1.4%
Minimum SIP : 500
Best for tax saving and tax planning.
You can select 2-3 funds in based on your investment goals. Start your investment with SBI mutual funds.
How to start mutual funds investment in SBI:
- Login to SBI mutual fund portal
- Provide PAN card and other details for KYC.
- Provide bank account information and cheque for SIP
- Select funds to start your mutual fund SIP.