Select the Best Mutual Funds
How to choose a good mutual fund?
In India the competition among mutual funds are very high. One of the best indicators is to check its total returns. Obviously, if a mutual fund is giving you a good total return, it is one that has proved itself to be valuable to you.
Total return includes all –dividends, capital gains, interest, etc. It is expressed as a percentage of the original net asset value.
Evaluate its past performance
It has been an accepted fact that the best way to choose a fund is to evaluate its past performance. This is one of the integral characteristics of a successful investor. By tracking how profitable a fund has been, you will gain a feel for the fund. Like stocks, mutual funds have their own “personality.” Understanding this personality will help even the novice investor make decisions that are more intuitive and well-informed.
There is the commonly held belief by many investors that certain funds do better or worse than others because they briefly outperform or underperform the averages. This is thought to be only temporary. In the end, funds are supposed to revert back to the normal middle ground.
If one looks at the performance of funds over time, it is true that most funds do become average performers.
Look for the some of the following indications to choose a fund:
- The fund has outperformed similar funds.
- Over the years the fund has made huge profits.
- The fund consistently has made a profit.
- The fund has outperformed some of the major indexes (SENSEX, NIFTY)
The above indications may appear to be common sense, but you will be noticing that how many investors does follow this.
Recommended Read :
- Methods to Select the Best Mutual Funds
- What are Mutual Funds?
- Types of Mutual Funds in India
- 5 Types of Popular Mutual Funds in India
- Understanding Mutual Funds Returns?
- Fixed Deposit Vs Mutual Fund
- Real Estate Vs Mutual Fund
- SIP Vs Mutual Fund
- Mutual Fund Investment Strategy
- Mutual Funds in India
- What is Net Asset Value (NAV)?
- Open Ended Mutual Fund Scheme
- Close Ended Mutual Fund Scheme
All i ever knew about mutual funds is they are subject to market risk. And than everyone kept telling me invest in mutual funds but they never explained or mentioned the risk factor. This article sure helps me make my mind up. After reading this article i surely know where to start from. For an amateur like me these guidelines are just perfect to give me a kick-start. Thank you!
Mutual funds- a detailed description given in the article on this.One of the best indicators is to check its total returns. Obviously, if a mutual fund is giving you a good total return, it is one that has proved itself to be valuable to you.The process of it’s evaluation of it’s past performance is a good guide for the user and should be read.
Enlightening yet a vague article !!! Even though the author has given out some pointers for selecting the mutual funds , article fails to educate on risk factors of mutual fund investing.The pointers here can be seen only with respect to returns comparison.But any average investor is interested to test the investment avenue for risk check than returns.But overall a nice article !!!!