How do first time investors make a mutual fund comparison?

As an investor, you have many mutual fund options to choose from.  There are a number of Mutual Funds available in the markets. However, you need to take a closer look to make a mutual fund comparison.

Making a mutual fund comparison in India among so many mutual funds and selecting the one which suits your needs can be a tough  task. However, below checkpoints can be helpful when it comes to selecting a fund. 

1) Check if the fund you are selecting matches your goals. Outline your investment goals with the assistance of a financial advisor. Then it would be easier to make a mutual fund comparison with a mutual fund comparison tool to find the best-suited fund type. 

2) Assess how the respective asset class works. This could be related to the type of assets in the fund. In equity funds, it is the rise in the market value of the concerned shares that give you returns whereas in debt funds it is a fall in interest rates that increase the NAV and the future value of your investment. 

3) Check how liquid is this investment. If you are in need of money on an emergency basis, would you be able to sell immediately?

Some investments have lock-in periods during which it cannot be sold, for example, ELSS investments, some have exit loads.  Perform a mutual fund comparison for all these parameters before going for the type of fund. 

4) Look how long has the AMC been in business. Is their management experienced? Have they made money for investors before? 

5) Use a mutual fund comparison calculator to check how has this fund performed over the long run? Where can you get an independent evaluation of this fund?

You can also refer to factsheets of mutual fund schemes that would show you their past performance. Check performance over long periods like 5 years or so that will give you an idea of how the fund has performed in different market cycles. 

      6) Check the total fees structure of the scheme . Investments bought through distributors charge a transaction fee and commission. Mutual funds charge an expense ratio, for managing investments. You can invest in Direct Plan to of mutual funds wherein no commission and transactions charges is to be paid to save cost.  

Yes, stay informed of these vital details too before you decide to select a mutual fund!

Disclaimer: The views expressed here in this Article / Video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The Article / Video has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of the Article / Video should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. None of the Quantum Advisors, Quantum AMC, Quantum Trustee or Quantum Mutual Fund, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in the Article / video.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.