How to Choose the Best Performing Mutual Funds

There’s no doubt that we have to think about our investments right through the year. One of the best ways to invest today is via a mutual fund, but understanding the right fund is not really easy. It does take a lot of research and a fair bit of planning. Here are a few things you have to keep in mind before you invest –

  1. Look at the risk you are willing to take before you invest. If you are looking for a high risk investment, you can invest in funds that invest in smaller companies or in mid cap or sector funds. That means you are not banking on the past performance of the industry of fund but more on the way the sector would grow. In case you want to invest with medium or low risk, you can invest in a hybrid or a debt fund.
  2. The duration of the fund is one the most important things to look out for. The simplest way to choose the best performing mutual funds is to look the ones that mature in 8-10 years. The longer your period of investment, the better the returns.
  3. Look at the past performance: The easiest way to know about the future of the fund is to look at the past of the fund. Look at what is performing well for the past five years so that you can make an informed decision of your investment.
  4. Invest only after studying the AUM. The value of the investments in the mutual funds scheme is the AUM or assets under management. Typically, you should look at investing in a fund which has an AUM greater than Rs 100 Crores. That means there is a lot of trust on the fund.

With the right planning and research, you can definitely pick the best mutual funds to invest in. It would not only give you better insight to your investment but also better returns.


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