How to select one particular mutual fund for investment?



Suppose there are 4/5 mutual funds which all seem very good in terms of return. If I am planning for long term investment, how do I choose say 2 of them for investment through SIP? How to compare various important factors, in particular, how to decide if in future, the fund will perform well? (all MFs give warning like this: past performance is no indicator of future performance). Can you suggest any good websites which help in this regard?

8 Replies to “How to select one particular mutual fund for investment?”


  1. Just one comment about the MFs warning of past performance is no indicated of future performance.
    Although this is true, i find out that the fund will keep doing quite well on the future although not the to be the top one. So there is still worth to look up for the past 3-5 year records.


  2. If you invest for long term as you mentioned then choose the mutual funds which has given good return since its launch.Always go for equity divesified mutual funds because sometimes particular sector fund(like TATA Infra, Reliance Pharma etc) may give you good return but it has huge risk, any bad news about the sector and your fund will be making loss.As per my knowledge Reliance Growth is the best long term mutual fund in Indian Mutual Fund history. It is also rated among top 3 mutual fund scheme among emerging market mutual fund.So invest a 40% of your investment in Reliance Growth Fund, 40% in any good mutual fund(like Prudential Discovery,HDFC 200,UTI Sundar etc.) and remaining 20% in any smallcap mutual fund like Sundaram Small& Midcap.One thing always remember never invest in NFO of a new mutual fund as it is not cheap and it has no track record.For successful return from investment regularly monitor the NAV value of your funds from the following website

    http://www.amfiindia.com
    http://www.valueresearchonline.com

    For further query you can also mail me at
    [email protected]

    Happy investing………………..


  3. I think when it comes to investing in the market or selecting a mutual fund then different people have different suggestions but it is always better to consult some expert as they can help you out in properly understanding the market.
    If you are planning to invest then it is better you consult some expert like mansukh, religare or even india bulls as they can help you out in properly understanding the market and preparing a strategy that will ensure better returns on investment


  4. This web site might be of some help to you.

    http://www.valueresearchonline.com/funds/default.asp

    If you are picking just one mutual fund to start with, select a broad based mutual fund. They are more likely to perform well over the long term. Although they will never be top performers, they also most likely will never be worst performers either. One should actually invest in several different mutual funds with focus on different market segments to mitigate specific risk.


  5. You don’t,
    A business-finance professor of mine a couple years ago, researched and wrote and article that proved that the majority of mutual funds (90%-95%+) could not beat the market.

    If you are going to be looking into buying a mutual fund, you would be better off with the market.

    Thus, looking into an ETF that can mimics the market, while incurring the least amount of management fees and rebalancing costs would be your best bet.
    NYSE:SPY
    NASDAQ:QQQQ
    and others.

    The market is the only thing that you can really rely on and is the benchmark. Most people try to develop these huge plans to beat the market, though most fail. The fact that they give you a warning that past performance is not an indicator of future performance is essentially a carte blanche for them. Due to the fact that if they lose money, they will still take their fees and commissions. It is exceptionally hard or expensive to find funds that have watermarks and requirements for continuous good returns.

    Don’t throw your money away, buy the market product and be happy.
    jc


  6. One has to choose a mutual fund based on no. of factors. Past performance is just one of the factor. While evaluating the past performance, one has to evaluate in terms of how the fund performed during various market cycles. Some of the other factors are risk profile of the fund and its preferred secor and whether these match with our investment needs. Another important factor is the expense ratio. Some other factors include diversification, dividend history, fund manager, AMC profile etc. When an advisor advises about a fund, he evaluates all these factors and then suggests a particular fund.

    I am an AMFI certified mutual fund advisor and can be contacted at [email protected] or 0120 4224336 for further advice.

    Swarup Mallik


  7. Visit http://www.valueresearchonline.com to learn more about mutual funds. Invest only in the top rated funds on this website. Your core investment should be in large cap funds ( at least 60 – 75%) like HDFC TOP 200 , DSPBR TOP 100 , Birla Frontline. Avoid NFOs and sector funds. Register under portfolio on this website and feed all your investment data. The value of your investment is updated everyday.





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