Equity or Debt, long term or short term, retirement fund or regular income; there are many decisions that need to be made before you start investing in Mutual funds. Once these decisions are made, the hunt for the schemes begins. There are many elements to consider before selecting a scheme – investment objective, portfolio, risk category, fund manager, etc.
What is an investment method?
It is the investment behavior employed by individual investors or fund managers while making investment decisions. For example, an equity fund manager might choose a method of investing and holding large cap stocks while another fund manager might opt for active trading in large cap stocks. Assuming the investment objective and time horizon to be the same, the investment method can be a huge differentiator in determining the returns.
There are various investment methods deployed by investors and/or fund managers which include:
An investment method gives the investor an insight into the approach deployed by a fund manager to achieve the scheme’s objectives. Some fund managers also change their investment methods with time to keep up with the market trends. Let’s look at understanding some of the investment methods.