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Po sted o n August 21, 20 13

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The Right Mutual Fund for you Mutual funds are actually another type of investment which pools together fund from many investors. These funds are then used for investment purposes. When you make your choice to purchase a mutual fund, this makes you into an actual shareholder, which also means that you are now part owner of the mutual fund. Based on the ownership of the fund you will be given the rights to vote. Fees and Ot her Charges Profits are made by mutual funds by charging a small percentage of fees to you. Make sure you know the different types of fees and how they can impact your income that when you have decided to invest. A good tip is to keep an eye out for no- load funds to avoid the sales fees which are usually present. Keeping an eye out for this will help you avoid a front- or back- end load fee. However, do look out for other fees in a no- load fund. There’s usually high management expense ratio or other administrative fees. Some companies do this just to make up for their loss at sales charges. Expenses PDFmyURL.com


It would be wise to have a quick look at the mutual fund’s expense ratios by referring to the annual fees being charged by all funds. These expenses may include management fees to distribution fees. When talking about fees, the same quote is always the best, the loser the better. Try to find funds with low fees. This can really help in increasing your return rates. Index funds may charge up to 0.20% of the assets, where as for actively managed funds should charge up to 1.5% per year. Do keep in mind that the average fee increases with time. So do not be surprised when the fees have increased significantly after a decade. Funds with fees above 1% per year are expected underperform. Turnovers Look at how consistent has the company been for the recent years. Make sure the fund returned over the past few years has been good. Do keep in mind that you do not only want to know about funds that have been showing good results, instead look for those that have been doing so consistently throughout the years. Most funds tend to have good performance when they are still new in the industry. Therefore, it would be wise to think again before investing even if you have caught air of mutual funds in India that have been said to outperform the market. In sum, your shortlist should fulfill the following: • No or low sales charges (no load funds, level loads, high administrative charges) • Low expense ratios • Low turnovers, try not to exceed 50% a year, and optimally close 20% With this said, the rest of it is up to you. Good luck with investments! This entry was po sted in Uncat e go rize d and tagged Financial Planne r Pune , Mut ual Funds by f inancialadviso r0 2. Bo o kmark the pe rm alink .

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The Right Mutual Fund for you