Mutual funds were initiated with an aim to provide an opportunity to small investors to increase their wealth. A mutual fund may be said to be an investment made up of a pool of monetary contributions operated by professional investment managers. The money collected from investors is then invested in securities such as stocks, bonds, other assets etc.
A recent research on mutual fund investments suggests that people are holding back from putting their money into mutual funds. The reason behind this being— lack of knowledge & high risk associated with it.
There are various mutual fund companies that provide guidance to the common public. The Best Mutual Funds To Invest In are those that focus on investors’ needs and also include integrity in their work. With the ever-increasing frauds and loopholes in the system, very few organizations have such values incorporated at their core.
One can select the best Mutual Funds To Invest In on the basis of following criteria:-
1) Performance-based Ranking:
Ranking should be checked at quartile rankings that show how the fund has performed from quarter to quarter. The scheme that has remained in the top quartile most of the time may be selected.
2) Fees:
A high expense ratio may affect the fund’s return. Therefore, you can control the amount to be invested in mutual funds and make a difference in returns earned.
3) Ratio Analysis:
A fund that returns 7% with low risk is always better than the one giving 10% returns on a very high risk. Metrics such as standard deviation, the value of risk, Sharpe ratio etc. should be used.
4) Experience of the fund manager:
The fund manager’s experience is highly important, as he/she is the ultimate decision maker. Basic information such as who the person is, what is his/her past track record, and other relevant personal and professional details about the individual should be known.
We cannot assume accurately about the performance of the mutual funds, but the criteria given above can surely help to earn more on your investments. There are companies that only promote their best funds and attract investors; and on the other hand, there are a few companies that still follow corporate values such as simplicity and transparency.