Financial planning with equity mutual funds for 2024

The total Assets Under Management the mutual fund industry in India stood at ₹ 52,74,001 crore as of end of January 2024. Of the total number of folios, the number of folios under equity, hybrid, and solution-oriented schemes stood at 13.57 crore. Equity mutual funds offer investors the benefit of high returns, while also exposing their investments to higher risk. Investors who wish to benefit from the power of compounding by investing via an SIP in equity mutual funds can refer to the points mentioned in this article.

Financial planning with equity mutual funds – A step-by-step procedure


Here is a six-step procedure that can help you plan your equity mutual fund investments in 2024 from scratch:

  • Define your investment objectives and analyse your risk-taking capacity: Before choosing an equity fund, you must write down your investment objectives. Some examples of investment objectives are – “Saving for my retirement”, “Saving for an upcoming family vacation in 2025” and “Building an emergency fund for a job transition later this year”. You must also analyse your risk-taking capacity at this stage to be able to choose the right equity funds in the later stages.
  • Identify potential growth sectors in 2024:Next, you must read about potential growth sectors online. You could invest in the tech sector with a historical CAGR (Compounded Annual Growth Rate) of 12.8% or in the now-booming infrastructure sector. Read up on these sectors online and identify the sectors in which you would like to invest.
  • Research equity mutual funds online and prepare a shortlist:At this stage, you can start researching equity mutual funds online that belong to the sectors which you identified. At this stage, it is advisable to maintain a list of mutual funds that interest you to further narrow-down your search.
  • Use a mutual fund SIP calculator to select mutual funds: The fourth stage is an important one since here is where you will decide on your investment amount, investment tenure, and will select your fund. You must use an online mutual fund SIP calculator to compare the mutual funds in your list and decide on a monthly SIP amount.
  • Opt for the SIP mode of investment:Systematic Investment Plans help you benefit from Rupee-Cost Averaging and the power of compounding, and thereby help you earn higher returns.
  • Monitor your investments regularly, and evaluate the fees charged:

After investing, you must keep regularly assessing your investment portfolio. Doing so can help you check whether your investment is in alignment with your larger investment objective. You must also keep evaluating the fees charged by the mutual fund house such as expense ratio. Doing so can help you compare two mutual funds and decide if you wish to switch to a less expensive mutual fund in the near future.

An SIP investment calculator is a free, online tool that can help you plan your equity fund investments in advance. You can know the returns of various types of equity mutual funds by entering the investment amount, investment tenure, and the rate of interest.