Assessing the Best Mutual Fund

#1
Today there are a number of mutual fund schemes available in the market with different track records. Further, with new launches happening every few months, an investor is perplexed and confused as to where should he invest his hard earned money. Should he select the top mutual fund based on the past track record or should he choose a scheme that offers high potential in the future. This question becomes more important for an investor who wants to invest his hard earned money in the best performing scheme.
One needs to keep in mind that while choosing the best scheme, the role of a mutual fund company is also equally important. This is because the performance of a scheme to a large extent dependent is not only on the fund managers but also its support team. No single fund manager can deliver best performance on a consistent basis year after year.
What should be the basis of investment and what should be the time frame for choosing an investment. Once a scheme is selected, how important is the investment objective? This has led to the evolution of Mutual Fund Performance Measurement. Mutual Fund performance measurement has the following objectives:
  • Enable Investors to select a scheme with their identified risk profile as fund management style varies across schemes within the same category
  • Bring in transparency and consistency in the way each scheme is evaluated in terms of its investment objective
 
#2
I agree with Sara Cooper that there are many providers of mutual fund schemes in the market and it actually becomes very difficult for a layman to finalize on one mutual fund for his investment needs. There are various options also available like gold fund, equity fund, tax saving funds and other such. So, before selecting a scheme you should see its track record and then go for it because without planning investment does not take place.
 

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