The favourite question of most investors is “how to select mutual funds”. We inverted the question to “how NOT to select a mutual fund“.
In this post, we looked at factors like star ratings, past performance or brand names and the over importance they are given in fund selection. These factors, at best, can be used as a starting point in your mutual fund search.
Then we stepped further to look at the other oft searched query – top mutual funds to invest in. We made a list of the top 10 mutual funds by size and looked at various features of these schemes. It has been observed that investors don’t really pay attention to these factors. Instead they rely on just one factor – past performance.
In the fund selection exercise, there are factors, beyond performance of the fund, that need to be given due importance. These include:… [Continue Reading]