Things to consider when investing in mutual funds - Fusion - WeRIndia

There are many investing methods to improve returns. However, several people prefer to invest their money in mutual funds to get good returns.

Though some mutual funds seem to be interesting, you may not get the returns you expect.

This is because certain criteria are there to invest in mutual funds.

Experts advise to look for various things before investing your money in them.

Here are certain things to be considered while investing in mutual funds:

The first and foremost thing is to check their ratings. The ratings for mutual funds are provided by Crisil as well as Value Research online. You can also use various sources to check the ratings from time to time. While checking the ratings, observe the consistency as it is an important factor to predict the future fund performance as well. Remember that mutual fund investment is subject to market risks.

Look for the performance of the mutual funds in which you want to invest your money. This is indicated by returns in percentage terms. Check the constant performance as well. Observe the performance of one year, three years and five years to get a better conclusion.

You should also observe the expense ratio. Higher expense ratio indicates lower returns for investors.

Check the reputation of fund house as well as fund manager. The better the reputation of the fund, the higher the performance would be.

Broad benchmarking is another criterion to measure the performance of the funds.

Assets under management is another measure to know the popularity of the fund.

Exit load is another important thing to consider while investing in mutual funds. It is charged when you withdraw from the scheme. The ideal exit load is one per cent, if you withdraw your money within one year.

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