Should I invest in mid cap, multi cap, or index fund?

I am 25 years old and pursuing Ph.D. I am investing Rs 1,000 each in SBI Bluechip Fund, SBI Small Cap Fund, and Rs 500 each in PPF account, NPS tier 1 HDFC Pension Managemnet, NPS tier 2 LIC Pension Fund. Now I am planning to invest extra Rs 2,000 in mutual funds. So, where should I invest this amount - mid cap, multi cap or index fund? Please review my folio.
- Deepak Joshi

We always ask investors to choose mutual funds based on their goals, investment horizon, and risk profile. If you can, try to identify some goals. Try to put a number to the goal and then start investing to achieve it.

You are currently investing in a large cap scheme and small cap scheme. Large cap schemes are considered ideal for conservative equity investors, whereas small cap schemes are recommended to aggressive investors with a very high risk appetite. You should at least identify your risk profile, and find out whether these schemes are in line with it. You should invest the extra money also after taking these steps. This will help you to choose ideal mutual funds.


You don’t need a government-sponsored pension scheme at this juncture. You cannot withdraw the entire money from NPS before you are sixty years old. An equity mutual fund scheme may be a better option. You can withdraw the money if you want the money at any point of time. Also, you can sell your investments if the scheme is performing badly for a prolonged period.