Characteristics of the Best Performing Mutual Funds

Before one plan to invest in a mutual fund, all one need to know more about it than blindly making investments. It is advisable to select the mutual fund that is not just popular but also has a better chance of delivering long term results for the portfolio asset.

There are umpteen numbers of Mutual Funds India and to select the top-performing mutual fund is not a cakewalk affair.  One has to take into account certain aspects before making the final choice:

1. Low Expenses: Before selecting the investment vehicle, there are some factors within your control and some are beyond. Factor that is out of the control of the investor is the direction of the stock market and the one which can be very much controlled by the investor is; understanding the expense ratio of the mutual funds that one chooses to invest in. As per research in every mutual fund investment, the funds with the lowest expenses outperformed the ones with high expenses. So while looking for the best mutual fund investment, it is advisable to consider prioritizing funds with low or no expenses as they can potentially perform better in the long run.

2. Strong Fund Management: Top performing mutual funds have strong management. Not only the fund manager but the Best Performing Mutual Fund has a solid group of analysts, who research the stocks or other investments bought and sold by the fund managers. Any change in the management or the manager in the mutual fund, which you hold should be viewed as a red flag and should be watched closely to learn more about the new manager and find out if he/she will make any changes in the investment process or other aspects.

3. Consistent Process: One needs to fully understand the costs and investment strategy of any mutual fund before making an investment. For actively managed mutual funds one has to consider vital points like is the fund consistent, why it is different from other funds positively, is the process sustainable, etc. It is vital that the person is able to understand the investment process of the fund and whether this process is consistent or not.

4. Strong Parent Company: Running a mutual fund is a complex proposition that requires more than a skilled manager to be successful. Having a strong parent can help with the recruitment of assiduous support staff. Strong and ethical parent company plays a vital role in the performance of mutual funds.

An investment that is done, taking into account the needs and requirements of the investor and closely following the performance aspects of the mutual fund, will always give good long term returns.

5 Traits of a Strong Mutual Fund

A strong and diversified portfolio of high performing mutual funds can provide investors with an excellent vehicle for generating wealth. With umpteen numbers of mutual funds in the market, selecting the proper funds to invest cannot be an easy task.

For a layman, it is difficult to choose the best from the so many Mutual Fund Companies available in the market. There are certain basic traits that differentiate normal mutual funds from the best ones.

Below are the vital traits of a Best Performing Mutual Fund that helps in generating good amount of wealth:

Low fees or expenses: Mutual funds with low expense ratio are advisable to go for. However low expenses do not mean low performance. In fact, the best ones in the given category are among those that offer expense ratios below the category average. Investors often fail to realize how big a difference even a relatively small percentage increase in the fund expenses can affect the profitability of the investor.

1. Consistently Good Performance: Most investors utilize investing in mutual funds as part of their retirement planning. Investors, therefore, should select a fund based on its long term performance and not on its past years one. Consistent performance by the fund managers over a long period of time showcases the fund will pay off well for an investor in the long run. The best funds are able to minimize losses during tough times like economic slowdown or cyclical industry phases.

2. Back Ground of the Fund Manager: A mutual fund that is consistently performing well is having a good fund manager and it is advisable that the investors review a fund manager’s background and past experience and performance as part of their overall evaluation of the fund.

3. Stick to Robust Strategy: The best performing funds perform well as they are directed by a good investment strategy. Investors should be clearly aware of the investment objective of the fund and strategy the fund manager uses to achieve the objective. The fund manager should clearly explain the change and the reason for any change in the strategy to the shareholders.

4. Trustworthy with Solid Reputations: The best mutual funds are invariably offered by companies that are transparent and clear about their fees, operation charges and never conceal any information from potential investors or mislead them.

5. Plenty of Assets: The mutual funds that perform well in the market are those that are widely invested but often fall short of being funds with the highest amount of total assets. Investors often get attracted when they perform well and thus they expand their base.

Selecting a good mutual fund is not an easy affair but it should be guided by the perfect investment goals and plans of the investor along with the capacity to tolerate risk and the financial status.

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Benefits of Hiring Best and Professional Mutual Fund Advisor