Mutual fund institutions are always coming out with new and innovative fund offer (NFO) plans. There are now 15,14,21,270 mutual fund schemes with approximately 46,27,687.23 crores in assets under administration. The allure of market returns has prompted more investors to choose equity fund schemes over debt schemes that provide stability, albeit at significantly lower yields.
| Year | Assets under Management | Total Folios | SIP Folios | SIP monthly contribution |
| March 31, 2020 | ₹22,26,202.88 crores | 8,97,46,051 | 3.11 crores | ₹8,641 crores |
| March 31, 2023 | ₹40,04,637.60 crores | 14,57,30,600 | 6.36 crores | ₹14,276 crores |
| July 31, 2023 | ₹46,27,687.23 crores | 15,14,21,270 | 6.80 crores | ₹15,245 crores |
Despite the confusion surrounding the selection of mutual funds for investment, investors are eager to discover how to select the best funds to meet their financial objectives. A successful financial path is never without flaws, which is why many investors resort to seasoned experts for guidance. Do-it-yourself (DIY) investors typically look for prior performance outcomes, thinking that the future will mimic the past and that high returns from those funds will continue unabated.
While returns are important when choosing a mutual fund, there are also other important things to consider. These elements include:
Investment goal:
What are your specific investment goals? Is it for retirement, a child’s education, or a down payment on a house? Your mutual fund selection should be in line with your investment goals.
Fund management team:
The management of the fund makes the final decision. Conduct extensive study and choose a fund managed by a team with a proven track record.
Liquidity:
How easily can you sell your fund shares? The liquidity of funds fluctuates. If you need quick access to your cash, choose a highly liquid fund.
Risk tolerance:
How much danger are you willing to take? Mutual funds are classified as low, moderate, or high risk. Choose a fund that corresponds to your risk tolerance.
Fund expenses:
Mutual funds charge fees to manage your investment. These expenses can reduce your profits, emphasizing the necessity of selecting funds with low fees.
Tax implications:
Mutual fund taxation is determined by criteria such as fund type and period of shareholding. Before considering an investment, be sure you understand the tax implications.
When selecting a mutual fund, it is critical to consider all of these factors.
However, the aforementioned are frequent characteristics or attributes that investors may consider before making their next mutual fund investing decision. However, there are additional elements at work that investors frequently overlook when deciding which mutual fund(s) to invest in. These are some examples:
