How to invest in Mutual Fund monthly?

#1
I am planning to invest in MF using SIP. I can invest 3000/- per month. I am 32 yrs old and I an planning for 3-5 yrs long term investment. Someone suggest me to invest 50% in Large cap, 30% in Small/Mid Cap and 20% in debt funds. I don't have any idea about these funds.

Can anyone explain what are these funds and how can I choose. Please help me in planning.
 
#2
What's your risk appetite?
If you are not very conservative, I would suggest you start with one balanced fund and one large cap
Say IDFC Premier Equity and HDFC Prudence

If you are conservative, then just start with HDFC Prudence and invest in other funds as you slowly build your confidence.

For 3000/month, you should not go beyond 3 funds at a time.
 

rvm123

Active Member
#3
Basically in mutual fund, the AMC will be collecting money from individuals and buy shares from the market. The value of the shares, if get appreciated, will increase the Net Asset Value (NAV) of the fund. Instead of we individually buy and sell shares, the AMC on our behalf will buy and sell in the Mutual fund.

The fund which buys and sells shares of Large cap companies are called largecap MF's and if they deal with small / medium cap companies, they are called small / midcap MF's. Large cap means a company with larger capital. Say companies like ONGC, TCS, INFOSYS, OIL India, etc will fall under the category. (Actually Cap means the No. of shares of the Company multiplied by the market value per share).

If the fund is invested in Debt instruments like Debentures, etc., instead of shares, it is called a debt fund. Here, the return may not be abnormal. Because the funds are invested in debentures, etc., only the interest income will be there. There will not be any capital appreciation, dividend income, etc.