InvestorQ : I want to invest 5000 rupees per month as mutual fund SIP, which allocation of mutual funds should I consider?
Arusha Ray made post

I want to invest 5000 rupees per month as mutual fund SIP, which allocation of mutual funds should I consider?

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priya Shah answered.
10 months ago
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You should invest in mutual funds based on your financial profile, goals, and risk appetite. Any investment done in isolation will not be worthwhile in the long run. Always link your mutual funds to your goals and accordingly discern the mutual fund list. Another thing to understand here is, mutual funds shouldn’t be selected based on what’s the best performing today. Today’s performance is not any kind of reflection on future performance. These funds may work well or they may not-there is no guarantee. If you want to choose funds that work best with your financial profile goals, here’s a shortlist of crucial checks-

i. Experience of the fund management team: The more experienced the fund manager, the higher chances of generating alpha (returns over and above the benchmark).

ii. History of the fund house: Decisions taken by the fund house and the fund manager may have a direct impact on your investment's performance and the realization of your financial goals. Hence, it is important to do a check on the fund house, history of existence, track record across schemes before selecting a scheme.

iii. Past performance: Ideally, you should review a fund’s performance for a couple of years and review how it has performed in different market cycles. The more consistent the performance, the better the fund.

iv. Size of the fund: Invest in funds that are neither too big nor too small. Somewhere in the range of Rs3,000-10,000 crore should be sufficient.

v. Costs matter: Comparing the fund’s costs and performance against those of similar funds will shed light as to the kind of value you’re getting for your money.

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