Questions to Ask Before You Invest in a Mutual Fund

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Questions to Ask Before You Invest in a Mutual Fund

Investing in direct mutual funds is riddled with different opinion, perception & also surrounded by myths. The reality check gets buried when mutual fund advisors or distributors end up providing with their insights & analytics. Retail investors are the ones who end up getting lost in this maze. Furthermore, let’s discuss about a few things that can be considered while selecting a mutual fund scheme 

Also, you will find large variations under the title rakings, thus, nothing is fixed. Earlier mentioned, volatility in performance is known as another problem. A star performance mutual fund cannot maintain the same performance every time, therefore, better to check with it before investing. Make a habit of checking your investment portfolio monthly.  

Furthermore, a few points might help you out. Here: 

  • The ObjectiveBefore selecting any direct mutual fund, make sure you take a look at the objective of your investment. The purpose can be either buying a house or savings for your retirement. The objective is different for different fund.  
  • The Past BehaviorIf we look at the past performance, then nothing is constant unless and until you know how to pitch the fund tact. Just a quick tip: instead of putting a limit on the fund’s performance, it’s good to compare over the last 5-10 years.  
  • Expense Ratio: Fund’s expenses are eventually borne by its investors; a lower expense ratio will keep more money for you in that fund for future, therefore, higher growth. TIP: Be aware of the investment charges (if, any) you will be paying to the house of a mutual fund. Onetime fee is levied whilst investing. Get in touch with your fund manager for the same.  
  • Fund House Reputation: Prefer selecting a mutual fund which has a strong investment base and has experienced fund managers. An incomplete knowledge can turn out to be a crisis. A fund house with healthy experience across market cycles has more tendency to tide over the future. 
  • Liquidation: When you select a fund, make sure you are aware of how soon it will be liquidated to have cash in hand, especially in an emergency. 
  • KNOWLEDGE BASE: ELSS funds are tax savings and have a lock in period of three years. Thus, it’s important to consider every aspect before selecting a fund. 

Source: https://www.gulaq.com/5-things-to-consider-whilst-selecting-a-mutual-fund-scheme/ 

Like said, we hope to make you understand the therapy of selecting a mutual fund scheme. Try to research every financial institution and then take a call. 

Furthermore, you can read more about mutual funds here: https://www.gulaq.com/blog/ 

Also, if you are looking to invest in Direct Mutual Funds, hop on to www.gulaq.com and pick the fund according to your risk-appetite, horizon, expected returns, goals, and time-period. Else, you can talk to one of the experts regarding the same. Email: [email protected]  

Not to miss, you can be KYC verified FREE with Gulaq 

*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing. 


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