How To Pick A Winning Mutual Fund In Order To Make Good Returns-zuczug

Stocks-Mutual-Funds According to the SEBI regulation, each mutual fund objective must be spelt out correctly in its prospectus. Also, a board of directors must be appointed to represent the interests of the shareholders. If you are new to investment and wealth creation, then you might want to know what a is mutual fund? It is the alternative way of investing in stocks and bonds. An asset management .pany sets up this fund and sells its units to various investors. It then invests the investors money in different assets, such as equity, debt market instruments, money market instrument, gold, real estate and more. A fund could invest in a single instrument, such as equity, or it can be of the hybrid category, which .prises of investments in more than one type of securities. Things to Consider Before Choosing a Particular MF Much like all other investment tools, mutual funds in India also carry risk. Return on investment depends on market volatility, therefore it is essential to do proper research before investing in any particular scheme. You must analyse your risk appetite, investment objective and time horizon in investment in order to help decide on the type of scheme appropriate for you. The scheme could be debt, equity or of a balanced category. After you have decided where you want to invest your money, you must consider the following before choosing a scheme of one particular asset management .pany. 1. Consistency in Performance Rather than investing in a scheme that gave 100 percent return recently, you should choose schemes that have given a consistent performance over a long period of time. For this, you can study the mutual fund NAV (Net Asset Value) over a period of 3, 5 or 10 years. Choose a scheme that has consistently performed well, especially in .parison to its peer set, and time and again surpassed its benchmark indices. 2. Risk Adjusted Return Every scheme carries a certain percentage of risk. Investing in an MF scheme is a trade off between risk and return. You can calculate the risk adjusted return of a scheme by .paring it with the return given by risk-free instruments, such as government securities or term deposits. Choose a scheme that has given better returns for the same kind of risk taken by others. 3. Expense Ratio This is the ratio that shows the annual expense borne by the .pany in terms of percentage of the average net asset. It is wise to invest in a scheme with lower expense ratio. Moreover, as the NAV increases, the expense ratio falls (its gets distributed amongst various investors). 4. Experienced Team You must check the credentials of the fund manager and the team. You can also look up the return based performance of an asset management .pany. The best mutual funds in India are also periodically listed by research .panies on the basis of performance. It is advisable to diversify your assets and invest in more than on type of MF. About the Author: 相关的主题文章: