‘Ask for a Certified Mutual Fund Advisor before you buy funds’

There are over 800 schemes in India, how should an investor choose?This has to be a self-exercise, you have to sit down and think what you w...

There are over 800 schemes in India, how should an investor choose?
This has to be a self-exercise, you have to sit down and think what you want, what are your needs. The second step is to find out how much risk you can take. If you are investing Rs 10 and are prepared to lose it all, you are a very high risk taker. If you can to lose Rs 5, then you are a medium risk taker. If you can lose only Rs 2, then you are a low risk person. We are all between zero and ten.

First evaluate your needs, work out your risk profile and then buy a mutual fund scheme

Now you look at products. A risk averse person should look at the gilt market. Gilt funds are funds that invest only in government securities where there is no credit risk, the interest rate risk is there, but that is in the short term. For the medium risk, look at income funds. Then come the balanced funds, diversified equity and debt funds mixture. For even higher risk, go to sector funds.

Investing in a mutual fund is not like making a bank deposit or buying bonds or NSC, but it is an investment process that requires you to put in something that is why the need to read the Key Information Memorandum. Buy schemes only from AMFI Certified agents.

Story continues below this ad

How should an investor select a scheme?
Look at the pedigree of the scheme. Whose scheme is it? You go to the track record in terms of performance. Today there are third party performance evaluators like CRISIL and ICRA that rate fund return and risk.

But Risk Factors say that past performance is not a indication of future performance?
We are saying that past performance may not be an indication of the future, but it is a guide. When you take a child for school admission they do look at past grades, there is no promise of future performance, but past is looked as a guide. Look at the benchmarks. It is reflective of the fund. Look at the investment strategy of the scheme and match that with yours. Then look at expense ratio. There are limits, but there are funds that offer efficient options.

How will an investor brought up on government taking the risk do this.
Everything is changing, the children don’t walk to school anymore, they go in a car. Therefore the need to take responsibility of their investment decision.

How can a customer get redress if he has a problem with a mutual fund company?
If any complaint comes to us, we will interact with the concerned fund and make sure that the problem is solved.

Story continues below this ad

Large clients of funds get the benefit of buying at chosen NAVs.
This is not the practice in the industry, normally it does not happen.

The RJD’s key face and Leader of the Opposition (LoP) Tejashwi Yadav, party supremo Lalu Yadav’s son, will again contest from his stronghold Raghopur.

Amid Mahagathbandhan crisis, RJD unveils list of 143, drops 36 MLAs, focuses on ‘M-Y’

Political Pulse7 hr ago

The RJD, lead player of the Mahagathbandhan, released its full list of 143 candidates for the November Bihar Assembly elections. Its key face Tejashwi Yadav will contest from Raghopur, and 41 sitting MLAs have been renominated. The party has dropped 36 sitting MLAs and fielded young leaders, signaling a bid to consolidate its core Muslim-Yadav vote base. The Congress has fielded 60 candidates.

View all shorts

Live Blog

PHOTOS