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.