InvestorQ : What are the factors for selecting a mutual fund?
Rishita Das made post

What are the factors for selecting a mutual fund?

sara Kunju answered.
3 years ago
Mutual funds are the most popular investment for investors because they are very simple to understand and easy to invest. A mutual fund is a pool the money collected from investors by the fund managers and the collected money is invested in assets like bonds, stock, etc. by the fund managers on the behalf of investors.

Every mutual fund has a different identity in terms of its investment. The objective of a mutual fund is to create a long-term capital appreciation. Allocation of assets, Top holdings, and sectors of investment is an important parameter to avoid cannibalization amongst similar funds. The investment style of the funds i.e. Growth, Blended or Value should also be looked into.

An important factor in assessing the Mutual Fund is you should watch and compare the past performance of the fund but not to make the decision solely on the basis of past performance as it may or may not be sustained in the future.
Assessment of the mutual fund performance can be done on the following parameters:
Investment goal:- whether u want a regular income or want to create your wealth.
Past performance of the fund:- analysis of the past performance helps in understanding the impact of different market positions on the return of the fund.
Performance against index:- compare the fund performance with the benchmark index.
Expense Ratio of the fund:- it consists of fund management charges and all other costs                  
Compare the funds with other funds of the same class in respect to return and charges of the fund.
Change in the portfolio of assets held by the fund shall be checked.

The market is full of fluctuations but this doesn’t mean that you need to assess the performance on a daily basis. You should evaluate the fund every six months, depending upon your investment time period.