How To Know Which Mutual Fund Is Best For Sip?

Posted by jigneshshah on June 12th, 2018

This article describes about how one can know which mutual fund is best to invest in. The article contains information about various parameters, which enable you to select the best mutual fund schemes available in the market. You can further select the best one as per your preference.

Before you finalize any mutual fund portfolio, it is imperative for you to check out the star ratings, reviews, performance, and other such parameters. Most of the investors make this mistake by not considering these factors while finalizing the mutual fund portfolio. Therefore, here we provide you with some parameters to look upon before you select, which mutual fund is best for sip.

Have a look at the following parameters to know which mutual fund is best for sip.

1. Performance Ranking

Always look for the quartile ranking of the mutual funds. If you will go for recent or long-term performance, you can make a mistake. Select the one, which stays on top for most of the time, as it consists of 25% of the peer group.

2. Analysis of Ratio

Along with risk and return ratio, it is imperative to check alpha in fund, Sharpe ratio, standard deviation and the return generation done by fund manager in comparison to the benchmark. This factor is all about checking the consistency of the fund manager in last few quarters.

3. Expense ratio

This parameter is vital for deciding which mutual fund is best for sip. The higher the expense ratio, lower will be the return. Fund management and distribution expenses are endured by the scheme. Lower expense ratio is better for any scheme.

4. Experience and tenure of fund manager

Role of a fund manager is of utmost importance in the performance of the fund. Therefore, it is significant to know the experience and track record of the fund manager. Look for the fund’s performance, alpha, quarterly performance, and other such things.

5. Scheme asset size

It differs for equity and debt schemes, which should be hundreds and thousands of crores, respectively. The investment value is high in debt funds per investor. Select the one, which is best for you as per your asset.

Hence, the aforesaid parameters are vital for deciding on which mutual fund is best for sip. Looking for a good fund manager is also of a great significance. Therefore, look on these parameters and select the best investment scheme to invest in mutual funds.

The author is a renowned name in mutual fund industry. She gives advice to the people on various market investment schemes such as, which mutual fund is best for sip.