You’ve probably heard the tagline “Mutual Fund Sahi Hai” in advertisements, urging you to invest in mutual funds for long-term wealth creation. But is it really as “Sahi” (right) as they claim with flash like disclaimers? Or is there more to the story?
In this article, I’ll break down the reality of mutual fund investments—the benefits, risks, and whether they truly live up to the hype. Let’s read ahead.
What is “Mutual Funds Sahi Hai”?
“Mutual Funds Sahi Hai” is an investor awareness campaign (means mutual fund is the right way to invest) initiated by the Association of Mutual Funds in India (AMFI). The goal? To educate the public on the benefits of mutual fund investments and encourage participation in Indian financial markets.
While the campaign simplifies investing for beginners, mutual funds are not a one-size-fits-all solution. Let’s explore both sides of the story.
Why Mutual Funds Are “Sahi” (Positives)?
✔ Diversification – Mutual funds invest in multiple assets, reducing risk compared to individual stock investments.
✔ Professional Management – Fund managers handle stock selection and asset allocation, making investing easier for beginners.
✔ Compounding Benefits – Long-term investments in mutual funds, especially equity funds, can generate substantial returns through compounding.
✔ SIP Flexibility – With Systematic Investment Plans (SIP), you can invest small amounts regularly, making it accessible for everyone.
✔ Tax Efficiency – Certain mutual funds (like ELSS) offer tax-saving benefits under Section 80C, especially who opt for old tax regime.
The Other Side: When Mutual Funds May Not Be “Sahi” (Negatives)!
❌ Market Risk – Mutual fund returns are market-linked, meaning your investment value can fluctuate. It can turn negative as well if you invest most in bull run.
❌ Expense Ratios & Hidden Charges – Fund management fees can eat into your returns over time. So opt for a direct mutual fund only.
❌ Lock-in Periods – Some funds (like ELSS) have lock-in periods, restricting you from liquidating or withdrawing amount for 3 years.
❌ No Guaranteed Returns – Unlike fixed deposits, mutual funds do not guarantee returns, making them unsuitable for risk-averse investors.
❌ Fund Manager Dependency – Your returns depend on how well the fund manager performs; a bad choice can lead to under-performance.
So, Should You Invest in Mutual Funds?
✅ If you have a long-term investment horizon, can handle market fluctuations, and want to build wealth, mutual funds can be a great option.
❌ If you need fixed returns, short-term stability, or have a low-risk appetite, mutual funds may not be ideal solution. Build your emergency fund first.
Even in 2025, only less than 5% earners invest in the financial market, rest live from hand to mouth and don’t care about their retirement life. Thus my simple advice would be investing in any one index fund as the minimum way to stay invested in the financial market, and Nifty 50 Index is the best choice.
Before doing any investments make sure you have 3-6 months equal salary in the Fixed Deposits that too in small-small amounts which you can break in case of emergency or have something in cash or liquid money.
These are my recommendations if you are not investing anywhere:
- UTI Nifty 50 Index Fund
- HDFC Nifty 50 Index Fund Direct Growth
- SBI Nifty Index Fund Direct Growth
- ICICI Prudential Nifty 50 Index Fund Direct Growth
- Navi Nifty 50 Index Fund Direct Growth
Just invest in any one of them, all are same with very small differenece.
You could easily aim for 10 to 12.50% returns considering long term investments. You don’t need any fancy advisor or expert advice for this.
Bottom Line? Mutual funds sahi hai—but only if they align with your financial goals, risk tolerance, and investment strategy. Thus it is more important to understand your risk factors first and then align that with your financial status, so you don’t end up doing silly mistakes like early widthdraw when there is a crash crunch.
Would you invest in mutual funds? Let’s discuss in the comments! 🚀
Leave a Reply