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A young professional juggling student loans and rising rent: How to choose the best mutual fund for me?

Milind

Milind Vadjikar  |1238 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Jan 11, 2025

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
Ashfak Question by Ashfak on Jan 10, 2025Hindi
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HOW TO SELECT BEST MUTUAL FUND

Ans: Hello;

It depends on your risk appetite, financial profile and investment horizon.

This will lead you to the type of mutual fund you should look at!

Then you should look at rolling returns of funds in your shortlisted category across various time intervals

Evaluate fund performance versus category average and benchmark across time intervals

Check risk adjusted returns

Investment strategy/philosophy of the fund house/fund manager

AUM of the fund and hence TER, past record of the fund house, Exit load, lock-in, if any

Some AMCs do not allow NRIs from US and Canada to invest due to taxation issues. This needs to be borne in mind if you expect to migrate to these countries.

Even others who may allow need lot of paperwork and have constraints.

If you think you can do all this on your own, well and good, else you may contact a mutual fund distributor.

Best wishes;
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   |181 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

Ramalingam

Ramalingam Kalirajan  |8869 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 20, 2024

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how to analyse and choose a best mutual fund scheme in equity segment like large, mid, small, flexi cap etc
Ans: Analysing and Choosing the Best Mutual Fund Scheme
Understanding Your Investment Goals
To choose the best mutual fund, start by understanding your financial goals. Consider your risk tolerance, investment horizon, and financial objectives.

Types of Equity Mutual Funds
Large-Cap Funds:

Invest in large, well-established companies with stable returns.
Suitable for conservative investors seeking steady growth.
Mid-Cap Funds:

Invest in mid-sized companies with potential for high growth.
Suitable for investors willing to take moderate risk for higher returns.
Small-Cap Funds:

Invest in small companies with high growth potential.
Suitable for aggressive investors willing to take high risks.
Flexi-Cap Funds:

Invest across large, mid, and small-cap companies.
Suitable for investors seeking diversification and flexibility.
Criteria for Selecting Mutual Funds
Performance History:

Look for consistent performance over 5-10 years.
Compare with benchmark indices and peers.
Expense Ratio:

Lower expense ratios can increase your returns over time.
Compare the expense ratios of similar funds.
Fund Manager's Track Record:

Assess the experience and performance of the fund manager.
Consistent fund manager performance is a positive indicator.
Portfolio Composition:

Review the fund's holdings and sector allocation.
Ensure diversification and alignment with your risk tolerance.
Fund Size:

Larger funds may offer stability but can be less flexible.
Smaller funds can be more nimble but may carry higher risk.
Risk and Return Analysis
Standard Deviation:

Measures the fund's volatility. Lower standard deviation indicates less risk.
Sharpe Ratio:

Measures risk-adjusted returns. Higher Sharpe ratio indicates better risk-adjusted performance.
Alpha:

Measures the fund's excess return relative to the benchmark. Positive alpha indicates better performance.
Beta:

Measures the fund's sensitivity to market movements. Lower beta indicates less risk.
Consulting a Certified Financial Planner
Choosing the best mutual fund requires thorough analysis and understanding. Consulting a Certified Financial Planner (CFP) can provide professional insights tailored to your needs.

Personalized Advice:

A CFP can provide personalized recommendations based on your financial goals.
Expert Analysis:

Benefit from their expertise in analyzing fund performance, risk factors, and market trends.
Regular Reviews:

A CFP will regularly review your portfolio to ensure it aligns with your goals and market conditions.
Benefits of Regular Funds Investing through MFD
Professional Guidance:

MFDs offer expert advice and personalized service, helping you make informed decisions.
Convenience:

MFDs handle all administrative tasks, making the investment process smoother.
Tailored Recommendations:

MFDs provide tailored investment recommendations based on your risk profile and financial goals.
Conclusion
Choosing the best mutual fund in the equity segment requires careful consideration of various factors. By understanding your investment goals and analyzing fund performance, you can make informed decisions.

Consulting a Certified Financial Planner and investing through a Mutual Fund Distributor can provide professional guidance and tailored recommendations, ensuring your investments align with your financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8869 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 10, 2024

Asked by Anonymous - Jun 10, 2024Hindi
Money
I want to invest in mutual funds. Can u suggest which one is the best
Ans: Understanding Mutual Funds
Mutual funds pool money from various investors to invest in diversified assets, managed by professional fund managers. They offer diversification, professional management, and potential for good returns.

Types of Mutual Funds
Mutual funds come in various types, each serving different financial goals and risk appetites.

Equity Mutual Funds
Equity funds primarily invest in stocks. They offer high return potential but come with higher risk. Suitable for long-term goals like retirement or children's education.

Debt Mutual Funds
Debt funds invest in fixed-income instruments like bonds and government securities. They are less risky and suitable for short to medium-term goals like buying a car or planning a vacation.

Hybrid Mutual Funds
Hybrid funds invest in a mix of equity and debt, offering balanced risk and returns. They suit investors seeking moderate risk with a balanced approach.

Sectoral/Thematic Funds
Sectoral funds invest in specific sectors like technology or healthcare. Thematic funds focus on themes like infrastructure or emerging markets. High-risk, high-reward category.

Active vs. Passive Funds
Active funds are managed by fund managers who make decisions to outperform the market. Passive funds track a specific index.

Disadvantages of Index Funds
While index funds have lower fees, they often underperform compared to actively managed funds during market downturns. Active fund managers can make strategic decisions to protect investments.

Benefits of Actively Managed Funds
Active funds leverage fund managers' expertise to navigate market complexities. They can adjust portfolios based on market conditions, offering potential for higher returns and better risk management.

Choosing the Right Mutual Fund
Choosing the right mutual fund requires understanding your financial goals, risk tolerance, and investment horizon.

Assessing Financial Goals
Identify your financial goals: buying a home, children's education, retirement planning, or wealth creation. Align mutual fund selection with these goals.

Understanding Risk Tolerance
Risk tolerance varies among investors. Assess your comfort with market volatility. High-risk tolerance suits equity funds; low-risk tolerance fits debt funds.

Evaluating Investment Horizon
Investment horizon influences fund selection. Short-term goals (1-3 years) align with debt funds; long-term goals (5+ years) align with equity funds.

Regular vs. Direct Funds
Regular funds involve mutual fund distributors (MFDs) and offer advisory services. Direct funds eliminate intermediaries, reducing fees but requiring self-management.

Disadvantages of Direct Funds
Direct funds save on commissions but demand significant time and knowledge. Investors may miss out on expert guidance, impacting returns and risk management.

Benefits of Regular Funds
Regular funds provide access to Certified Financial Planners (CFPs) who offer personalized advice, portfolio management, and regular monitoring. This support can optimize returns and align investments with goals.

Evaluating Fund Performance
Evaluate mutual fund performance by analyzing historical returns, consistency, and comparison with benchmarks and peer funds.

Historical Returns
Review past performance to gauge potential returns. However, past performance doesn't guarantee future results.

Consistency of Returns
Consistency is crucial. A fund with stable returns over various market cycles indicates good management.

Benchmark Comparison
Compare fund performance with relevant benchmarks. Consistent outperformance indicates strong management.

Peer Comparison
Evaluate a fund against its peers. Consistently outperforming peers signals a robust fund.

Importance of Expense Ratio
Expense ratio impacts net returns. Lower ratios are preferable, but consider the services and performance offered by the fund.

Fund Manager's Track Record
The fund manager's experience and track record are vital. A skilled manager can significantly impact fund performance.

Understanding SIP and Lump Sum Investments
Systematic Investment Plan (SIP) and lump sum investments are common ways to invest in mutual funds.

Systematic Investment Plan (SIP)
SIP allows regular, small investments. It offers rupee cost averaging and disciplined investing, reducing market timing risks.

Lump Sum Investment
Lump sum investment involves investing a large amount at once. Suitable for investors with idle cash and knowledge to time the market.

Tax Implications
Understanding tax implications is crucial for maximizing returns and planning withdrawals.

Equity Funds
Equity funds held for over a year attract long-term capital gains tax at 10% on gains exceeding Rs 1 lakh annually. Short-term gains (within a year) are taxed at 15%.

Debt Funds
Debt funds held for over three years attract long-term capital gains tax at 20% with indexation benefits. Short-term gains are taxed as per the investor's income tax slab.

Asset Allocation and Diversification
Effective asset allocation and diversification reduce risk and enhance returns.

Asset Allocation
Divide investments across asset classes based on risk tolerance and goals. A balanced mix of equity, debt, and hybrid funds can optimize returns.

Diversification
Diversify within each asset class to spread risk. Invest in different sectors, themes, and geographies to mitigate specific risks.

Monitoring and Rebalancing
Regularly monitor your investments and rebalance your portfolio to maintain desired asset allocation and align with goals.

Monitoring
Review fund performance, portfolio alignment with goals, and market conditions periodically.

Rebalancing
Adjust investments to maintain target asset allocation. Rebalancing involves selling overperforming assets and buying underperforming ones.

Importance of a Certified Financial Planner
Engaging a Certified Financial Planner (CFP) offers expert guidance, personalized advice, and ongoing support.

Expert Guidance
CFPs provide professional expertise in financial planning, investment strategies, and market analysis.

Personalized Advice
CFPs tailor investment recommendations to individual goals, risk tolerance, and financial situation.

Ongoing Support
CFPs offer continuous support, portfolio reviews, and adjustments to align with changing financial goals and market conditions.

Avoiding Common Mistakes
Avoid common investment mistakes to safeguard your wealth and optimize returns.

Chasing Past Performance
Don't rely solely on past performance. Market conditions change, and top-performing funds may not always sustain returns.

Ignoring Risk
Understand and accept the inherent risks in mutual fund investments. Choose funds aligning with your risk tolerance.

Lack of Diversification
Avoid concentrating investments in a single fund or asset class. Diversify to spread risk.

Emotional Investing
Don't let emotions drive investment decisions. Stick to your financial plan and avoid impulsive actions.

Considering Your Financial Situation
Evaluate your current financial situation, including income, expenses, liabilities, and existing investments. This helps determine how much you can invest and in which types of funds.

Evaluating Existing Investments
If you hold LIC, ULIP, or investment-cum-insurance policies, consider surrendering them and reinvesting in mutual funds. These products often have high charges and lower returns compared to mutual funds.

Importance of Financial Education
Continuous financial education empowers you to make informed investment decisions.

Staying Updated
Keep abreast of market trends, economic changes, and new investment opportunities. Knowledge enhances decision-making.

Attending Workshops
Participate in financial workshops and seminars. They provide valuable insights and updates on investment strategies and market outlooks.

Final Insights
Investing in mutual funds is a strategic way to grow wealth and achieve financial goals. Understanding different types of funds, assessing your financial situation, and aligning investments with your goals and risk tolerance are crucial steps. Engaging a Certified Financial Planner offers professional guidance, personalized advice, and ongoing support, optimizing your investment journey. Avoid common mistakes, stay educated, and regularly monitor and rebalance your portfolio to ensure it remains aligned with your objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Nayagam P

Nayagam P P  |5979 Answers  |Ask -

Career Counsellor - Answered on Jun 08, 2025

Nayagam P

Nayagam P P  |5979 Answers  |Ask -

Career Counsellor - Answered on Jun 08, 2025

Asked by Anonymous - Jun 06, 2025
Career
I cleared jee adv and am confused about taking ECM IIT Delhi or ECE IIT Roorkee/Guwahati/Kharagpur
Ans: Choosing between ECM (Electrical Engineering) at IIT Delhi and ECE at IIT Roorkee/Guwahati/Kharagpur hinges on priorities:

Placement Consistency: IIT Roorkee ECE leads with 85% placements (2024) and robust roles in embedded systems/AI, followed by IIT Guwahati (85% placements, Intel/Qualcomm roles) and IIT Kharagpur (87.05% placements, semiconductor focus). IIT Delhi’s ECM lags at 55% placements (2024), though its alumni network and Delhi’s tech ecosystem offer broader opportunities.

Curriculum: IIT Delhi’s ECM blends power systems and electronics with interdisciplinary projects, while Roorkee/Guwahati/Kharagpur ECE emphasize VLSI, telecommunications, and AI/ML with specialized labs.

Research: IIT Delhi’s Centre for Automotive Research (Hyundai EV collaboration) and 5G labs suit R&D aspirants. Kharagpur’s E&ECE excels in quantum technologies, and Guwahati integrates nanotechnology.

Infrastructure: IIT Delhi’s modern labs and Delhi’s industry access contrast with Roorkee/Kharagpur’s established campuses and Guwahati’s growing facilities.

Location: Delhi offers proximity to startups/MPCs, while Roorkee/Kharagpur provide quieter academic environments.

Higher Studies: IIT Delhi’s global reputation aids MS/PhD applications, whereas Kharagpur’s research output (NIRF #5) strengthens academia pathways.

Faculty: All institutes have seasoned faculty, but Delhi and Kharagpur lead in industry-funded projects.

Alumni Network: Delhi and Kharagpur alumni dominate core tech leadership roles; Roorkee/Guwahati networks favor PSUs and startups.

Internships: Delhi’s location ensures diverse internships, while Guwahati/Roorkee partner with regional industries (e.g., oil, energy).

Branch Flexibility: ECE at Roorkee/Guwahati/Kharagpur allows minors in CS/AI, whereas Delhi’s ECM focuses on power/electronics.

Prioritize IIT Roorkee ECE for placements and specialization, IIT Delhi ECM for research/global opportunities, or IIT Kharagpur E&ECE for balanced rigor and innovation. All the BEST for your Admission & a Prosperous Future!

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Nayagam P

Nayagam P P  |5979 Answers  |Ask -

Career Counsellor - Answered on Jun 08, 2025

Asked by Anonymous - Jun 06, 2025
Career
Namaste, my daughter got 410000 ranking in kcet, 86% in Pu board,her percentage in PCM is 85,she wants to join for CSE core pl. advice us
Ans: With a KCET rank of 410,000, securing CSE core through KCET counselling in Karnataka is highly unlikely, as top and mid-tier colleges (e.g., RVCE, PES, MSRIT) have cutoffs below 50,000 for CSE. However, lesser-known private colleges or newer institutes with vacancy-driven cutoffs in later rounds may offer limited opportunities. Below are 15 colleges (based on KCET seat matrices and vacancy trends) that might consider such ranks for CSE, though admission is not guaranteed and may require management quota or direct admission:

East-West College of Engineering, Bangalore

Cambridge Institute of Technology, Bangalore

SKSJT Institute of Engineering, Bangalore

Rajeev Institute of Technology, Hassan

Ghousia College of Engineering, Ramanagara

Bheemanna Khandre Institute of Technology, Bhalki

Anjuman Institute of Technology, Bhatkal

Srinivas University, Mangalore

Bearys Institute of Technology, Mangalore

HKBK College of Engineering, Bangalore

Global Academy of Technology, Bangalore

Sapthagiri College of Engineering, Bangalore

New Horizon College of Engineering, Bangalore

Acharya Institute of Technology, Bangalore (non-core branches may have vacancies)

SJB Institute of Technology, Bangalore

Key Considerations:

Management Quota: Explore direct admission via management quota in private colleges, though fees are higher.

Branch Flexibility: Consider related branches like IT, AI/ML, or Data Science if CSE is unavailable.

State-Level Alternatives: Apply for Karnataka state diploma lateral entry (after polytechnic) or reappear for KCET.

Institutional Reputation: Prioritize colleges with NBA/NAAC accreditation and placement records (e.g., MVJ College, CMRIT).

Final Recommendation:
Opt for direct admission via management quota in private colleges like Acharya IT or New Horizon, balancing affordability and infrastructure. If CSE is non-negotiable, reappearing for KCET or exploring diploma lateral entry pathways may yield better long-term outcomes.

Related
Given her academic profile and rank range:
She should consider applying to colleges where the cutoff is within her reach—primarily those accepting ranks up to about 1 lakh.
She can also explore government quota seats or management seats which sometimes have different criteria.
It’s advisable to focus on reputed private universities like Reva University or NMAM Nitte that offer good infrastructure and placement. All the BEST for your Daughter's Admission & a Prosperous Future!

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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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