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Best mutual funds to invest for 20-30 years at this point

If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

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Last Updated: Apr 01, 2020, 10.23 AM IST
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I am interested in investing in mutual funds at this point of time. But I only want to invest in tax-free funds. I am interested in long-term like 20 to 30 years. So, which mutual funds would you recommend for me?
-Krishna Damodar Raj

It seems, you want to benefit from the sharp fall in the market in the last few weeks. A word of caution: The economy, both Indian and global, is passing through testing times due to the Coronavirus pandemic. It is not clear when the crisis will be over and the economy would recover. So, tread with caution. Do not assume that the market may not fall further or it may start going up soon. Invest only if you don't need the money for next seven years, and you can withstand further falls and volatility in the interim.

It is not clear what you mean by tax-free funds. Are you referring to mutual funds that offer tax-free returns? If so, sorry to disappoint you. Returns from both equity and debt mutual funds are taxed.

Are you looking for tax-saving mutual funds or ELSS funds that qualify for tax deductions under Section 80C of the Income Tax Act? If yes, you should invest in ELSS mutual funds. For more, see: Best tax saving mutual funds to invest in 2020

You should always choose mutual funds based on your financial goal, investment horizon, and risk profile. Since you have a long-term investment horizon, you may consider investing in equity mutual funds if you have the necessary risk appetite. However, since you have not mentioned your risk profile, it is not possible to suggest a suitable equity mutual fund category for you.

Here are some pointers. One, if you are a conservative equity mutual fund investor, you should invest in large cap mutual funds. If you have a moderate risk profile, you may consider investing in multi cap mutual funds. Aggressive investors may consider investing in mid cap and small cap mutual funds.

If you are looking for the best schemes in these categories, read: Best mutual funds to invest in 2020
(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)

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