How to select the best equity mutual funds for you?

When a person invests in equity mutual funds, his/her money is invested in a stock or a share. You can select the fund to invest through a fund manager. This makes this option quite risky and you must also be aware that this a long-term investment. You must also note that there are hundreds of companies wanting investors. They claim to earn you plenty of returns in the future. As equity funds require a good deal of selection criteria, this article will help you out.

The fund manager

Once you have made up your mind to invest in an equity fund, the first thing to do is find a manager. Before you invest, you must go through the funds managed by your manager. They have a list of funds, their performance through the years and other details. You must also choose a well-reputed manager. This is because the managers only decide on whether or not to make investments.

The funding house

This is an important aspect as you must be completely aware of the fund house. The status of investment over the years, returns policy, size of the fund house etc. Make sure that they have a consistent funding record. The fund house should also be popular to get you the expected benefits.

Fund expense ratio

It is always advisable to choose funds with low expense ratio. You pay this to manage any fund to the AMC (Asset Management Company). However, if this compromises with the fund performance, then you may proceed with a high expense ratio. It is risky but it can be highly profitable when the fund house can win over its fellow competitors. So, you can take this risk only if your fund house is doing extremely good in the industry.

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