How to Analyze the Best Mutual Fund

Best Mutual Fund Analysis

After all it’s your hard earned money, so think twice and consider the following points before selecting your mutual fund.

Profile of Mutual Fund

Understand where the mutual fund is going to invest your money.  It’s very important to know the investment sectors and fields where mutual fund is going to put your money. 

Don’t put all money in a single mutual fund

Don’t ever do the mistake of investing all your money in a single mutual fund and also in mutual funds which are sector specific.  Because if something gives wrong with the fund then all your money will be in trouble.  Also, if something happens to that sector then also your money is in trouble.  So invest / put your money in a mutual fund which is investing in diversified sectors / fields/ share.  You can also plan like one mutual fund of diversified equity plan, second mutual fund of balanced type and third one you
can plan of debt type etc.  In this manner your money will get diversified, the risk is reduced and you may get excellent profits.

Find the right fund :

• Look for past returns, dividend etc, the mutual fund has declared.


• Look for the brand name of mutual funds like Franklin Templeton, HDFC, Reliance etc.


• See how big is the mutual fund by studying factors like market capitalization, turnover etc., It’s good if the mutual fund has large market capitalization.


• If you have chosen an equity or stock market related mutual fund, then you may go for the SIP (Systematic Investment Plan) method.


• Customer services (It’s one of the important Points): The mutual fund company should be easily contacted i.e., you should be able to easily contact the mutual fund company or its executive, how quickly they respond to your questions or your fund related problems etc.

Compare Mutual Funds

Diversified equity mutual funds :

In this mutual fund type, the money is invested in various selected shares of the stock market.  It reduced the risk of investing in single stock. 

• Index Mutual Funds

This type of  mutual fund gets invested in indices or index like Sensex, NIFTY etc.,  This type of mutual fund has high risk and high returns. 

• Mid Cap Funds

Investment is done in various selected shares of medium scale industries.  According to mutual fund, the mid cap stocks have faster growth rate. 

• Sector Funds

In this mutual fund, money is invested in selected shares of specific sectors like auto, IT, Pharmaceutical, FMGC etc.  Investment in this type of mutual fund is avoided as your money is invested in only specific sector.

• Tax Saving Mutual Funds

Here your money may be invested in equity market, bonds etc.,  You get income tax benefit by investing in this type of mutual fund.