6 best formulas to choose mutual funds

Last updated on Dec 02, 2022 in Mutual Fund

Investment should be such that it should not be as low as Bank Fixed Deposit and should not be high risk like Stock Market, so today we will tell you how to choose the right mutual fund.

right mutual fund

1. Investment Period in Mutual Funds

If you think of investing in mutual funds, then you have to decide in advance that for how long you will not need the amount you are going to invest. Because if you want more returns in less time, then you will have to follow different Createria in both, if you think that the investment plan will be right in less risk, but you will get less returns. Hence choosing a mutual fund tenure becomes important.
If you want to invest for a short time, then you have to go with a fund like Liquidity, dept and if you want to keep the amount for a long period, then it is better to go with Equity Fund.

2. Track record of the fund manager

If you have to choose a fund, then the role of the fund manager is very important, so it becomes equally important to know their past record and how the funds run by them have given performance in the past.

We have seen many times that a fund has given very good performance in the last few years and due to some reasons its returns have changed drastically after the manager has been changed.

When a fund manager is appointed as a manager for a fund, he changes the fund sectors according to his own, so it is mostly dependent on the fund manager to run or not to run that fund.

3. Viewing Fund Portfolio

When we go to choose a fund, it is very important to see the percentage of fund investments made by that fund or the fund manager in which sector.

If there is a recession in any sector or in any Stocks due to any reason or its growth is about to decrease and in such a case the fund manager has chosen it, then you may suffer losses, many times it is seen in High Risk Mutual Funds. 

4. Comparison with other funds

If you want to know a fund properly, then it is very important to see how many returns have been given by funds matching the same or similar or similar portfolio, because if we justify something right or wrong, then it has only one way. If we compare it with its competitor, then we can get an idea of ​​it by comparing it with a Bench Mark.

5. Risk and Returns

In today's time, more than 2000 funds are available in the market, in this there are many types of funds like high risk, low risk, high returns, balance fund, so according to our risk and in how many days you will get expected returns. It is also necessary to see that it is coordinated.

6. Entry or exit of funds

You will get many such funds which will give you good returns, but if you want to withdraw money from their entry load or prematurely, then they will charge you very high exit load, this will reduce your profit, so it is very important to see.

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