How to Select the Right Mutual Fund? – MoneyMindz

By | 23/08/2018

India’s First Free Online/On-call Financial Advisory Portal – MoneyMindz

     You know the value of investing. That’s why you have begun to invest or at least have decided to invest. You feel you should invest in Mutual Funds. But then you are bewildered as to how your portfolio should be and what it must look like. Moneymindz, India’s First Free Online Financial Advisory

You have the choice to select any Mutual Fund, but of course, you want to select what suits you. Let’s drive away this confusion. Let us look at the criteria of opting out the right mutual fund.

1. The Expense ratio

Managing a mutual fund scheme requires certain expenses from mutual funds, like advertising expenses, administrative expenses, transaction costs, investment management fees, registration fees, custodian fees, audit fees as a percentage of the fund’s net assets. This percentage cost is called “Expense ratio” of the fund. The expense ratio incurred by a Mutual Fund AMC is managed within the limits specified under the SEBI (Securities and Exchange Board of India) mutual fund regulations. The NAV of the mutual fund is affected by the expense ratio of the scheme. Lower the expense ratio, higher the Net Asset Value. Get Personalized Advice On Mutual Funds From Kuber Mindz or Give A Miss Call On 022-62116588.

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2. Taxation in mutual funds

A mutual fund is either equity oriented or debt oriented. Equity-oriented means a fund where the investible funds are invested in equity sharers while debt oriented means a fund where the investible funds are invested in debt shares. LTCG(long-term capital gains) Tax is imposed if the mutual fund is held for more than 12 months. The Income Tax Act exempts the long-term capital gains from the equity-oriented fund to Individuals, Joint Families, companies, and NRIs. If, however you hold an equity oriented fund for less than 12 months, STCG(short-term capital gains) Tax is imposed.

3. Risk and return from the fund

You ought to know the nature of the fund you’re investing in. Equity mutual funds offer greater return with greater risk while debt mutual funds offer liquidity and are less volatile. The risk in debt fund is interest and credit risk. The equity fund is governed by volatile macroeconomic factors. Insurance Online Financial Advisory, Kuber Mindz

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4. Mutual Fund outlook

Every individual has his/her own opinion on something. Similarly, every organization works in a different way. One would be a value investing Mutual Fund Company while the other might like going for contrarian beliefs. You should go for the fund whose values and ethics you agree with.

5. Performance and Fund Managers

You must compare the risk and performance of a fund by finding out average returns and by comparing it with other funds. Go for the fund that you think suits you after you have gone through its performance reports. Also, see the Fund Managers experience and expertise. You have to be satisfied with his/her performance, otherwise exit that fund instantly.

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