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Ramalingam

Ramalingam Kalirajan  |2476 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Mar 18, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Mona Question by Mona on Mar 12, 2024Hindi
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How to find best performing funds? Which website gives correct comparison?

Ans: Can a best-performing mutual fund now continue to be a best-performing mutual fund even after a week, after a month, after a quarter, after a year…?

Then in that case, do we intend to switch our investments every week or quarter to stick with the best-performing mutual fund of the time?

If it is a SIP investment, we cannot switch to the best-performing mutual fund for every SIP investment.

Is it possible for a cricketer to score a century in each and every match?

Even though this is completely ironic to the above question, the truth is,

“Don’t chase after the Best-Performing Mutual Fund!”

Regardless of the Mutual Fund scheme, the performance shown is history. Past performance is just a guide to check how well the fund manager did in the past.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Moneywize

Moneywize   |107 Answers  |Ask -

Financial Planner - Answered on Jan 03, 2024

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Which are the top-performing mutual funds in the current market? How do I know which mutual fund scheme suits my risk profile?
Ans: Determining the best mutual funds to invest in depends on various factors including your financial goals, risk tolerance, investment horizon, and market conditions. There isn't a one-size-fits-all answer as what might be the best for one person may not suit another.

Also, past market performance should not be the sole criteria for investing in market funds because such investments are subject to market risk.

But here’s a checkpoint to identify funds which match your risk profile:

• Understand Your Risk Tolerance: Assess how comfortable you are with the possibility of losing money in the short term. If you're comfortable with fluctuations for potentially higher returns, you might have a higher risk tolerance.
• Consider Investment Goals: Are you investing for retirement, short-term gains, or long-term wealth accumulation? Your goals will influence the type of funds you choose.
• Analyse Fund Characteristics: Look at factors like the fund's historical performance, expense ratio, asset allocation, and investment strategy. Funds that have performed consistently well might be worth considering.
• Diversification: Spread your investments across various asset classes (stocks, bonds, real estate, gold, silver, etc.) to mitigate risk.
• Consult a Financial Advisor: If you're unsure about your risk tolerance or which funds align with your goals, seek advice from a financial advisor.

Commonly, mutual funds are categorised based on risk profiles:

• Equity Funds: These are generally riskier but offer higher growth potential. They invest in stocks and are suitable for investors with a higher risk tolerance and a longer investment horizon.
• Debt Funds: These are less risky as they invest in fixed-income securities like bonds. They're suitable for investors with lower risk tolerance and those seeking steady income.
• Balanced/Hybrid Funds: These maintain a mix of stocks and bonds, offering a balance between growth and income. They can suit moderate risk tolerance.
• Index Funds: These replicate a market index (like the S&P 500), providing diversified exposure at lower costs. They tend to have moderate risk.

Each fund has its own risk level within these categories, so it's important to review the fund's prospectus and historical performance to align it with your risk tolerance.

Lastly, keep in mind that while historical performance can indicate a fund's potential, it's not a guarantee of future returns. Regularly reviewing your investments and adjusting them as your financial situation or goals change is essential.

..Read more

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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