Have you decided to continue your investment journey by choosing a mutual fund scheme? You may carefully make your choice after completing an efficient review and selection process amongst different mutual fund schemes.
Here’s a list of some of the parameters that you can consider as part of your selection process:
- Investment objective of a scheme: This informs you about the investment objective that is desired to be achieved by such a mutual fund scheme. It is important to note that this is not a guarantee that the objective will be met.
- Investment allocation / Strategy: It is important that investors choose a mutual fund scheme that allocates assets to align the investment with their appetite for risk and time horizon.
- Fund’s performance: This can help investors review whether a fund has been able to perform consistently and generate risk-adjusted returns over the long term. However, past performance should not be taken as a definitive indicator of the scheme’s future performance.
- Expense ratio: It may help investors to be aware of the expenses charged by the scheme, and exit load applicable (if any) that they may be charged while redeeming their holdings (at the net asset value or NAV disclosed on day of redemption)
- Tax implications: Different mutual fund schemes incur different tax implications and some may offer tax deductions. Knowing them may help investors avail tax-efficient returns.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.