Investment Tips: People’s interest in investing in mutual funds has increased in recent times. Especially, there is a steady increase in those investing in it through SIP. Apart from the stock market, money can also be invested in gold and commodities through mutual funds.
But it is important to take some precautions while investing in mutual funds. The biggest question is to choose the right mutual fund. Due to the presence of thousands of mutual fund schemes of companies in the market, this task has become even more difficult. Today we will tell you about 5 such things that you should keep in mind while choosing mutual funds.
Clarity on investment
There should be absolute clarity about investments. What is the purpose of investment, for how long and how much to invest. These questions should be carefully thought through. Especially for how long you have to invest, this question is important. Because mutual funds are different for different duration investments. One can choose debt funds or liquid funds for short term investments. If you are investing for the long term, then equity mutual funds will be better.
It is important to assess how much risk you can take to invest. For higher returns, you have to take more risk. Not only returns in investment, your capital should also be protected. Therefore, you have to choose such funds in which there is a balance between return and risk.
Fund house and manager’s record
If you have chosen a mutual fund, then definitely check the record of the company that brought this scheme. Along with this, it is also necessary to check the records of the manager of the company. Especially for these things, you have to know about how long the fund house has been working, how has been the performance of its other schemes, how is the company’s reputation in the market. This information is available on the website of any mutual fund company. There are also many websites, where information about the performance, rating, portfolio, etc. of any fund can be obtained.
Check out the past performance of the fund
If a fund has performed well so far, it is not absolutely necessary that it will perform well in future also. While choosing the right fund, study the past performance of different funds so that you can get an idea of which one is consistent. This will help you choose your preferred scheme and mutual fund. While choosing a fund, you can also check the ratings given to these funds by different rating agencies.
While choosing a mutual fund, you should be aware of the expenses associated with investing in it. Entry and exit load, asset management charges, expense ratio. Expenses like asset management charges and expense ratio must be looked into. All these expenses reduce your profit. An expense ratio of up to 1.5 per cent is considered appropriate for a mutual fund. If the expense ratio of a fund is more than this, then avoid investing in it.
(Investment advice in any fund is not being given by ABP News here. The information given here is for informational purposes only. Mutual fund investments are subject to market risk, read all scheme documents carefully. NAV can fluctuate depending on the factors and forces influencing the security market including fluctuations in interest rates.The past performance of a mutual fund may not necessarily reflect the future performance of the schemes. The Mutual Fund does not guarantee or assure any dividend under any of the schemes and is subject to the availability and adequacy of distributable surplus. Investors are advised to review the prospectus carefully and seek specific legal, tax and scheme You are requested to seek expert professional advice regarding the financial implications of investing/participating in
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