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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