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What factors should be considered before selecting a mutual fund?

What factors should be considered before selecting a mutual fund?

When it comes to picking the right mutual fund, there are several parameters to consider – return expectation, risk tolerance, investment horizon, investment knowledge, etc., and the investment can be judged based on past performance, expense ratio, assets under management (AUM), your fund manager’s experience, and …

How do I choose a direct mutual fund?

While filling up the online form, the investor must choose/ actively select the “Direct” plan option. One can invest by filling up a mutual fund application form physically and writing “DIRECT” in the blank space provided to fill up the ARN of the distributor in the application form.

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What are the various factors which affect the choice of mutual funds?

Factors for Choosing Best Mutual Fund Scheme

  • Performance Against Benchmark.
  • Performance Against Category.
  • Consistency of Performance.
  • Fund Manager’s Experience.
  • AMC Track Record.
  • Scheme’s Assets Under Management (AUM)
  • Expense Ratio.

Is it safe to invest in direct mutual funds?

Mutual funds are a safe investment if you understand them. Investors should not be worried about the short-term fluctuation in returns while investing in equity funds. You should choose the right mutual fund, which is in sync with your investment goals and invest with a long-term horizon.

Is it good to invest in direct mutual funds?

In due course, the lower expense ratio of Direct Plan translates to higher returns on the investments which keeps compounding over the years. Thus, the investment in Direct Plan would be worth more over a period, in comparison to investment in Regular Plan of the same scheme.

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How to select the right mutual fund manager?

Another important factor to be considered while selecting a mutual fund is the performance of its fund manager and how long he/she has been at its helm. For this, an investor should look at the fund manager’s experience with the fund in question and with other funds currently managed or managed in the past by him/her. 5) AMC Track Record

What should I consider before investing in a mutual fund?

Before investing in any fund, you must first identify your goals for the investment. A prospective mutual fund investor must also consider personal risk tolerance. A potential investor must decide how long to hold the mutual fund.

What are direct mutual fund plans?

Direct mutual fund plans were introduced by the Securities and Exchange Board of India (SEBI) in January 2013. It made mandatory for all mutual fund houses to launch ‘Direct Plans’ for all schemes.

Why don’t more people invest in direct mutual funds?

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Strongest reason is the lack of awareness and inadequate investor education. Further many prefer a broker to execute their transactions and render advice. Hence, many are still away from mutual fund direct plans. While many ignore the small difference of expense ratio between regular and direct plan. In the long run this gap cannot be ignored.

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