Mutual funds are one of the most popular investment options available in the market. Most people prefer investing their savings in mutual funds because they have the ability to generate good returns over a longer horizon.
You can regularly invest your savings into the mutual fund's schemes through Systematic Investment Plan (SIP) or a lump sum amount. However, to do so you must be aware of the top performing mutual funds in India. To help you in overcoming the confusion of selecting top mutual funds, we have listed down top mutual funds to invest in 2019.
Top Performing Mutual Funds In India in 2019
Let us now learn the factors that you must consider to select top mutual funds.
Factors to Consider Before Investing in Mutual Funds
• Performance of Fund
The performance of the fund is critical for the selection of any top mutual fund scheme. The performance tells you about the returns generated by the scheme over the years. You must ensure that the performance of the fund is taken over a long period so that you can make a better judgment and decision. Also, review the holdings of the fund in the past years. Check the risks that the fund is exposed to. By doing all these checks you will get a better idea of the fund’s performance.
• Fund Manager’s Experience
The experience of the fund manager plays a critical role in generating returns. The fund manager manages the capital of the mutual fund schemes and invests in the direction the market is moving. A good fund manager ensures that the mutual fund scheme is reliable for the long term. The mutual fund scheme can perform well only if the fund manager has the expertise and experience. Therefore, before putting your hard earned money into any top mutual fund, always consider the experience of a fund manager.
• Expense Ratio
The expense ratio is the fee that is charged by the AMC when you purchase their mutual find scheme. It is the charge for management, distribution, administration and promotion of a mutual fund. SEBI (Securities and Exchange Board of India) has capped these charges at 2.25% of the total fund assets. It is always recommended to purchase that mutual fund scheme which has a lower expense ratio.
• Exit Load
Exit load is a charge that is applied to the NAV of the mutual fund. It dents your investment value when you sell your units. The mutual fund schemes that charge lower exit load should always be considered as the first choice for investment. Since the exit load charge is applicable whenever you sell your mutual fund units, it is advisable to hold mutual fund units for the long term and reap its real benefits rather than exiting in the shorter period.
• Track Record of Asset Management Company (AMC)
Asset Management Company (AMC) is the fund house that manages the mutual fund scheme. The decisions at an AMC are taken by the Chief Investment Officer (CIO). If any poor stock is a part of the AMC then it raises questions on the selection of stocks done at the AMC level. Therefore, it is always recommended to track the past record of an AMC before investing in any of the top mutual fund schemes.
• Integrity of Fund’s Promoters
Before investing in the mutual funds, it is important to understand who the promoters of the mutual fund are? You must look at their record in the financial service domain and experience. Securities and Exchange Board of India (SEBI) grants the permission to run a mutual fund only to people who have integrity, experience in the financial service sector and fulfils the criteria of minimum net worth. Even after that, it is important for you to check their background for your own satisfaction.
The above mentioned are a few factors that you must consider before buying a top mutual fund scheme. Whether you are a beginner or a seasoned investor, you must be always active and alert while making an investment in the mutual fund scheme. To make things easier, you may invest in mutual fund through IndiaNivesh Ltd. Our in house experts understand your financial goals before suggesting you the apt mutual fund scheme.
Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.