New to MF investments? Begin your journey with these fund choices

Mutual funds offer diversification or access to a wider variety of investments. However, investing in them can be a complex journey, especially for newcomers. In a recent conversation with CNBC-TV18, Kalpen Parekh, MD & CEO of DSP Investment Managers shared invaluable insights on how to choose the right mutual fund for one's investment needs.

Parekh, an expert in the financial industry, emphasised the crucial importance of beginning the investment journey on the right footing. He advised that for those new to the world of mutual funds, it's wise to start with index funds. Parekh cautioned against the common mistake of chasing the highest return fund from the past year, as it often doesn't maintain its position in the following years. Instead, he suggested, "start first with an index fund or identify a good advisor who can build the portfolio for you."

An index fund is a type of mutual fund or exchange-traded fund that seeks to track the returns of a market index. It has lower expense and fee than actively managed funds. It follows a passive investment strategy and seek to match the risk and return of the market based on the theory that in the long term, the market will outperform any single investment.