Mutual funds are an investment solution for investors in every age group. Anybody can invest in mutual funds as per their investment needs.

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People invest in mutual funds with the aim of creating wealth, achieving life goals like retirement, kids’ higher education, vacation, building a house, etc.

Some invest in mutual funds to diversify their portfolio and because of the variety of choices this product offers.

However, the important question remains how does one choose mutual funds to meet the investment objectives?

Vaibhav Agrawal, SVP Research, Angel One Limited decodes the process as to how investors can look at picking the right mutual funds for their goals:

Before starting an investment journey in mutual funds, one must know their financial goal. It is an important aspect of preparing an investment plan.

Start with identifying the goals in different stages of life and then decide how much to invest and where and for how long. 

Once you know this, you need to select the mutual funds that help meet these objectives. Similarly, you must identify the risk appetite.

Not every person can take the same kind of risk when it comes to investing. Furthermore, an investor should also consider the investment horizon – which means how much time do you have to reach a financial goal.

There are other factors to be considered as well -- like the scheme ratings, fund manager, taxation, etc.

If you are a matured investor and have everything figured out, then here are the best performing mutual funds for January that can help you reap benefits as per your goal:

Canara Robeco Bluechip Equity Growth - Large Cap fund

Large-cap funds invest in blue-chip companies. These funds help investors to build wealth over a long-time horizon with relatively lower volatility compared to other equity funds.

Canara Robeco is a large-cap fund, suitable for those who want to invest for a longer time horizon. It can give returns that beat the inflation rate.

Parag Parikh Flexi Cap Growth - Flexi Cap 

Parag Parikh is a Flexi cap fund, suitable for investors looking to invest across different sizes of companies through a single fund.

Additionally, the Parag Parikh Flexi Cap scheme also gives exposure to foreign equities. About 30.35% of Parag Parikh Flexi Cap Fund's portfolio is invested in foreign equities.

It is also appropriate if you are investing for five years or more. In the Flexi-cap fund, the fund management team has complete freedom to invest in companies of varying sizes.

Kotak Emerging EquityGrowth - Mid Cap

Investors who are comfortable with higher volatility and have a long investment time horizon can invest in Mid-Cap funds, as they may provide higher returns over long time periods. 

Kotak Emerging Equity is the best fund in the segment. If you are planning to invest for more than seven years, this fund may give the expected gains. It is a fund that invests in mid-sized companies.

ICICI Pru Equity & Debt Growth - Balanced/Hybrid

Balanced funds invest across both equity and debt instruments. These funds are best suited for beginners who are not used to volatility in equity markets.

The investment in debt instruments limits the downside risk for a lower return compared to pure equity funds. ICICI Pru Equity & Debt is a balanced fund, suitable for conservative equity investors or first-time equity investors who are not used to sharp ups and downs.

HDFC S/T Debt Growth - Debt

Investors looking to invest in debt instruments for the short to medium term can invest in Debt funds, which provide better tax-adjusted returns compared to fixed deposits. HDFC S/T Debt is a suitable option for those who want to invest for one to three years and are looking for alternatives to bank deposits. It has a lower risk and lower expense ratio.

To sum up, mutual funds offer a variety of options, catering to every individual’s financial goals, investment tenures, risk appetites and liquidity needs.

You must evaluate these factors before investing in the above-mentioned funds. Make an informed investment decision that takes you closer to your financial goals.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)