Abstract:
Ways to Choose a Mutual Fund in India involves various steps such as, selecting those funds whose objectives match with those of the investor, evaluate the earlier performance of the funds, and consider the costs of the fund.
The various steps in Ways to Choose a Mutual Fund in India must be followed carefully by the investors for this will ensure that their money are invested in funds that suit their needs.
Ways to Choose a Mutual Fund in India involves many steps of which the first is to find out those funds whose objectives of investment are the same with those of the investor.
The usual objectives of investment of mutual funds are low or high risk, short or long term focus on liquidity, equity or fixed income, turnarounds or blue- chips, and focused on sector or general equity.
The second step is to asses the past performance of the mutual funds. This enables the investor to get an idea about the performance of the fund in comparison to its peer group and also the objectives that it has stated.
The way in which an investor can evaluate the past performance of the mutual funds is to find out the funds that have been performing the best and who also go along with the investment objectives of the investor. Then the investor should asses the performance of the mutual funds over different periods like three months, one year, and three years. The investor should then shortlist the mutual funds that stand among the top five in all of these horizons of time.
The third step in the many Ways to Choose a Mutual Fund in India is to diversify which means to select two or three mutual funds that go along with the investment objectives of the investor in order to expand the amount of investment. The fourth step in the various Ways to Choose a Mutual Fund in India is to consider the costs of the fund which means the cost that the investor has to pay when he is making investments through the mutual fund. The various fund costs includes sales loads, yearly fund expenses, and management fees. The investor should carefully examine the fund costs before he chooses a Mutual Fund.
Major mutual fund companies in India are:
- Tata Mutual Fund
- Morgan Stanley Mutual Fund India
- Kotak Mahindra Mutual Fund
- ABN AMRO Mutual Fund
- Prudential ICICI Mutual Fund
- Franklin Templeton India Mutual Fund
- Unit Trust of India Mutual Fund
- State Bank of India Mutual Fund
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