I Invested Rs. 75k in Mutual Funds!

Let’s talk about how, why and on what parameters I invested this amount of lump sum money in mutual funds.

Recently, my dad asked me to invest some money. That’s it. 

My next question or rather questions were, “Where, how much, for how long and what returns are you expecting?”.

He replied with three magical words, “I don’t care.” (lol). “You decide everything and just tell me once it’s done”.

Now for the next 3 days, I was busy researching the asset classes because I didn’t wanna play it wrong. 

You see, when it’s my own money, I know exactly what I want: my goals, risk appetite, timelines, expected ROI  -  everything. But managing someone else’s money is a whole different game, especially when it’s your dad!

So, I asked him three specific questions:

“Will 5–6x ROI work for you?”

“Can I lock-in your money for more than 5 years?”

“Are you ready to take some risk with your investment?”

He was very quick to answer “Yes!” to all of them.

So, I laid out a plan to invest Rs. 75k of the total money my father gave me in equity mutual funds.

-> Firstly, what are Mutual Funds?

Think of mutual funds like a money pot. You and thousands of others put your money in this pot, and a professional fund manager invests it across various places  -  like stocks, bonds, or gold - to help your money grow.

You’re not picking individual stocks; you’re trusting an expert to do it smartly for you. Easy, right?

-> Secondly, why I chose Mutual Funds?

There were three reasons for this:

• Diversification: More diversification = Less risk. MFs are great option to diversify the money across sectors, industries, and companies.

• Expertise: Fund managers do all the research, timing, and portfolio management for you so, why bother.

• Low Involvement: No daily stock-checking, no tracking news every hour. Invest → Relax → Let the pros do the job.

If you’re wondering “Why equity mutual funds?”, here’s the thing:

I understand equity better than debt.

Plus, for a 5+ year goal, equity beats debt in the long run.

-> Lastly, how I picked the funds to invest?

I checked and examined all these below parameters to pick the right funds to invest in for me:

1. Annualized Returns (1, 3, 5 years)

Shows how much the fund has grown each year on average.

👉 Look for:

• Consistent performance across all periods

• Avoid funds with high 1-year but weak 5-year returns (fluke alert!)

2. Rolling Returns

Checks returns over overlapping periods to measure consistency.

👉 Look for:

• Stable returns

• Less volatility = more reliable fund

3. Benchmark & Category Comparison

Compares the fund to the index (e.g. Nifty 50) and its peers.

👉 Look for:

• Funds that beat both benchmark and category average

4. Sharpe Ratio

Return per unit of risk. Higher = better quality returns.

👉 Look for:

• Sharpe ratio > 1

• Among peers, pick the one with a higher Sharpe

5. Beta

Measures volatility vs market.

Beta = 1: Same as market

Beta < 1: Less volatile

Beta > 1: More volatile

👉 Look for:

• Low Beta if you want stability

• High Beta if you’re okay with risk

6. Capture Ratios (Upside & Downside)

Shows how the fund performs in up and down markets.

👉 Look for:

• Upside > 100%, Downside < 100%

• Meaning: It gains more and loses less than the market

7. AUM (Assets Under Management)

Total funds managed. Popular ≠ always better.

👉 Look for:

• Equity funds with ₹1,000 Cr  - ₹20,000 Cr AUM

• Avoid too-small or too-massive funds

8. Expense Ratio

The annual fee deducted from your returns.

👉 Look for:

• Direct plans (lower fees)

• Equity funds: <1%

• Index funds: <0.5%

Free Resouces I used:

• Tickertape  - Great for filtering funds based on all the above parameters

• Groww  -  For easy fund comparisons, returns & ratios

🎥 Bonus: Watch Mr. Sanjay Kathuria’s video on how to pick the best mutual funds practically. Click here!

Final Thoughts:

Using these tools and metrics, I confidently invested Rs. 75k in equity mutual funds. I believe these funds have the potential to deliver 5–6x returns over the next 5-7 years.

But here’s my takeaway for you:

Don’t just invest. Invest smartly.

Even if you can’t invest a lump sum, start a SIP with Rs. 100/month.It’s small, but powerful. And with time, it grows into something big.

Mutual funds are the modern investor’s toolkit.

Start small, stay consistent, and let compounding do its magic.

Thank you for reading my thoughts and as always, rooting for you from afar.