A Guide to Mutual Fund

Mutual Fund Schemes in India

With the growing variety of mutual funds, an investor is bound to confront the difficulty of choosing the proper mutual fund; the fund which matches his risk tolerance and expectation for returns exactly. Presently there are plenty many mutual fund schemes available depending on the investment objective of the investor. But the first task of selecting a proper fund house seems most difficult.

The job of selecting a mutual fund house can become easier by following some easy steps.As an investor, the first job is to evaluate and fix the financial goal. The reason for investing carries immense importance in selecting the fund. Whether the need for money is immediate or not will be judged by the financial goal of the investor.

The common trend found in every investor is to look for the rating of a mutual fund. But a good rating will never ensure a good mutual fund, since a rating doesn’t reflect the funds past performance and neither it can capture the future prospect of the fund. The quality of a mutual fund is best judged by three factors: performance consistency, management skills and the expense limitation. These factors, when considered together, can help an investor gauge the mutual fund optimally.

The next important issue is the prospectus. It is always advised to read the prospectus minutely before investing. The investment firm includes all its financial details, including the net financial asset in the fund, the management team and the objectives of the fund in the prospectus. This manual works as a handy tool in knowing a mutual fund house more extensively.

In short, more updated and cautious an investor is, regarding the mutual fund, more prudent investor he will be.
Angel, one of the top three brokerage houses in India, provides an investor with a long array of MFs to choose from, the latest MF news and other MF related services.