Category: Mutual Funds

Understanding Mutual Funds

Even though most people are familiar with the term mutual funds, many are not sure about what it means. Mutual funds are increasingly becoming popular as a means of investment. If you are an earning individual, you have most probably invested your earnings in a savings account. However, the returns provided by savings accounts are not enough to meet your long term financial goals. Which is why, individuals are turning towards other means of investments for better returns such as a mutual fund.

mutual funds

What is a Mutual fund?

Mutual funds are an investment instrument that pools the money of several investors to invest in multiple assets of the financial markets. The investments are managed by an institution known Asset Management Company or AMC. They are a great investment instrument that will enable you to reap the benefits of share markets with lesser risks. Mutual fund investments involve less risk as the investments are managed by the qualified professionals of the AMC. There are basically three types of mutual funds i.e. equity based funds with high risks, balance funds with medium risk and debt funds with low risks.

How to choose a mutual fund scheme?

Investing your hard earned money is a serious decision. Since there are numerous companies offering mutual funds, an investor tends to get confused while making the final decision. These pointers will help you choose the right mutual funds scheme:-

  • Risk profile: – Before making the final decision of purchase, it is very important to match the risks of the mutual fund investment scheme with your risk profile. The risks of a scheme varies according to the types of assets invested in. If you are willing to take more risks for higher returns, choose schemes that are equity based. For those who are risk averse, balanced mutual funds or debt based mutual funds would be more appropriate.
  • Read the fine print: – The prospectus features all the details of the scheme, hence it is very important read through the entire document. The funds that offer a higher rate of return may carry a high amount of risk as well. Therefore, only choose a scheme after careful evaluation.
  • Costs: – Mutual funds carry various costs in the form of fees which vary from company to company. Even a small difference in the costs can have a bearing on the final returns. Hence before buying a mutual funds, ensure that the extra costs are not eating into your returns.

Best Mutual Funds to Checkout in May 2016

With numerous people getting inclined towards mutual fund investments, the field is becoming a hot of topic discussion. Very often discussions lead to the point where people start measuring the returns they derived on a stock, thereby leading to the opinion of which ones are worthy of earning the reputation of a better performing stock. Everyone has their own parameters of measuring the worthiness of a stock, depending on their personal goals that they are looking to achieve, and no one but a mutual fund distributor can truly judge the nature of the mutual fund. Here we provide you with a list of some of the best performers in the field of mutual fund investment


  • Axis Banking Debit Fund: This is an open ended growth mutual fund investment launched in the year 2012. It is benchmarked against CRISIL Short Term Bond Fund Index and has an asset size of Rs. 134.16 Crore. It has managed to accrue an annual growth rate of 8.6%.
  • Birla Sun Life Top 100 Fund: This is another example of an open ended growth mutual fund investment. It was started by the Birla group in September of 2005. This fund has been benchmarked at the CNX NIFTY index and has an asset size of Rs.1,645.31 CR. The average growth one can find here will be of 8.26%.
  • BNP Paribas Equity Fund: The investment objective of this open ended Scheme is to generate long-term capital growth from a diversified and actively managed portfolio of equity and equity related securities The Scheme will invest in a range of companies, with a bias towards large & medium market capitalization companies. The asset size is 1,088.95% and the benchmarking is done with respect to the NIFTY 50 index.
  • IDFC Premier Equity Fund – Plan B (D): The Scheme shall seek to generate long-term capital growth from an actively managed portfolio of predominantly equity and equity related instruments. This open ended scheme benchmarked with S&P BSE 500 has an asset size of Rs. 23.56 CR.
  • Kotak Select Focus Fund: The investment objective of the scheme is to generate long-term capital appreciation from a portfolio of equity and equity related securities, generally focused on a few selected sectors. This open ended dividend investment plan was launched in the year 2013. Its asset size is Rs. 573.73 CR. It is benchmarked against the NIFTY 50 index.