How To Pick A Profitable Mutual Fund
Mutual Fund

How To Pick A Profitable Mutual Fund

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We have all heard the advantages of investing in a mutual fund over trying to pick individual stocks. First of all mutual funds hire professional analysts that are market experts and devout many hours of study to the various stocks. Unless you want to devout a large portion of your free time to the study of the financial reports, you probably won’t have as much information to make a decision as a mutual fund manager.

Then there is the well documented advantage of diversification. Risk is reduced by holding several non-correlated investments. Put simply, some go up, some go down and combined, the return levels off the fluctuations, or risk.

Finally, a mutual fund offers smaller investors a chance to invest in small increments rather than having to save a large chunk of cash to purchase 100 shares of stock.

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Given the above advantages, it’s no wonder that mutual funds have become a very popular form of investing. Now there are thousands of mutual funds to choose from, so how does one make a selection? Here are a few tips:

1. Do not be seduced to jump on the recently performing best fund. It may seem like the safe and rational thing to do, but like individual stocks, you want to buy low and sell high, not buy high and pray for more growth.

2. Even good funds may not be able to overcome the force of the overall market. You should be looking for funds that can exceed the broad market without increasing risk. Each fund has certain risk parameters that it is required to follow. Read the prospectus closely to understand what these are.

3. Limit the number of funds that you own. Unless you are trying to simply achieve the same returns as the broad market, diversifying into many mutual funds will not reduce your risk or increase your return by much.

4. Funds that become too popular and too big tend to slip in performance. There are several reasons for this.

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One final point to keep in mind is that the type of fund will totally depend on your investment objectives. There are certain funds that are designed for your objectives be they retirement, income, growth, funding the kids college, etc.

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Best Performing Equity Mutual Funds

1, Tata Digital India Fund Direct-Growth

2, ICICI Prudential Technology Direct Plan-Growth

3, Aditya Birla Sun Life Digital India Fund Direct-Growth

4, SBI Technology Opportunities Fund Direct-Growth

5, Quant Tax Plan Direct-Growth

6, Quant Active Fund Direct-Growth

7, Quant Infrastructure Fund Direct-Growth

8, Franklin India Technology Fund Direct –Growth

9, Quant Small Cap Fund Direct Plan-Growth

10, Quant Mid Cap Fund Direct-Growth

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Best Performing Debt Mutual Funds

1, IDFC Government Securities Fund Constant Maturity Direct-Growth

2, ICICI Prudential Constant Maturity Gilt Fund Direct-Growth

3, ICICI Prudential Credit Risk Fund Direct Plan-Growth

4, Edelweiss Banking and PSU Debt Fund Direct-Growth

5, SBI Magnum Medium Duration Fund Direct –Growth

6, IDFC Government Securities Investment Plan Direct-Growth

7, Kotak Dynamic Bond Fund Direct-Growth

8, Nippon India Gilt Securities Fund Direct-Growth

9, ICICI Prudential All Seasons Bond Fund Direct Plan-Growth

10, Aditya Birla Sun Life Government Securities Fund Direct Plan-Growth

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Best Performing Hybrid Mutual Funds

1, Quant Absolute Fund Direct-Growth

2, Quant Multi Asset Fund Direct-Growth

3, ICICI Prudential Equity & Debt Fund Direct-Growth

4, ICICI Prudential Thematic Advantage Fund (FOF)Direct- Growth

5, ICICI Prudential Multi Asset Fund Direct-Growth

6, Baroda BNP Paribas Aggressive Hybrid Fund Direct – Growth

7, Kotak Multi Asset Allocator FoF – Dynamic Direct-Growth

8, Mirae Asset Hybrid Equity Fund Direct-Growth

9, Canara Robeco Equity Hybrid Fund Direct-Growth

10, SBI Equity Hybrid Fund Direct Plan-Growth

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