Mutual fund
This query is : Resolved
Bishal Gupta
(Querist)
09 May 2015
what are the things to be ensured before investing in a particular mutual fund..??
CS Mitesh Mehta
(Expert)
14 May 2015
1. Obtain and read the offer documents
2.Read through the offer documents and check to see whether the mutual funds identified meet your investment needs in terms of equity share and bond weightings, downside risk protection, tax benefits offered, dividend payout policy, sector focus and other parameters of relevance to you.
3.Check out past performance
4.Management fees, annual expenses of the fund and sales loads can take away a significant portion of your returns. As a general rule, 1% towards management fees and 0.6% towards annual expenses should be acceptable. Try and avoid funds that have a sales load, unless of course they have a consistent track record of being a top-performer.
5.Stay away from mutual funds whose fund managers change often.
6.As far as possible avoid investing in funds with an asset base of less than Rs25 crores.Invest in funds only after they have established a track record. And unless it is a really exciting new (theme) fund that fits into your asset allocation plan, try and avoid new funds.
7.Do not hold just one fund in each asset category. Its good to diversify your risk between different funds
8.Try to review your mutual fund holdings atleast once a quarter. If you follow the same principles to review as you did to identify the mutual funds you invested in, you will be able to take `sell decisions' very easily
2.Read through the offer documents and check to see whether the mutual funds identified meet your investment needs in terms of equity share and bond weightings, downside risk protection, tax benefits offered, dividend payout policy, sector focus and other parameters of relevance to you.
3.Check out past performance
4.Management fees, annual expenses of the fund and sales loads can take away a significant portion of your returns. As a general rule, 1% towards management fees and 0.6% towards annual expenses should be acceptable. Try and avoid funds that have a sales load, unless of course they have a consistent track record of being a top-performer.
5.Stay away from mutual funds whose fund managers change often.
6.As far as possible avoid investing in funds with an asset base of less than Rs25 crores.Invest in funds only after they have established a track record. And unless it is a really exciting new (theme) fund that fits into your asset allocation plan, try and avoid new funds.
7.Do not hold just one fund in each asset category. Its good to diversify your risk between different funds
8.Try to review your mutual fund holdings atleast once a quarter. If you follow the same principles to review as you did to identify the mutual funds you invested in, you will be able to take `sell decisions' very easily
Arpit Shah
(Expert)
15 May 2015
https://www.fundsindia.com/pages/learning/mf-video-tutorials/
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