For salaried class who pay income tax and not investing in equity/ equity MF, ELSS fundwould be the best way to start investing in MFs.
This is because.
1) You start an investment for tax saving and straight away get a return equal to your income tax rate notionally. This takes you off the initial fear of investing in equity.
2) The Lock-in period of 3 years allows you to get a feel of equity market.both ups and downs.
3) The confidence you gain by investing in ELSS can then be extended to equity investing.
ELSS= Equity Linked Savings Scheme. Investment in this fund upto Rs.100000 can be used for availing tax exemption.