MUTUAL FUNDS

Mutual fund is a trust with the sponsors, trustees, asset management company (AMC) and custodian approved by SEBI.
Large number of investors pooling their money with one common investment objective.
Investment objective /Scheme Investment Document (SID) defines how and where the money of the investors will be invested that is in bonds, equities debt funds etc.
Mutual funds are managed by fund manager
Income generated is distributed proportionally among all investors
Mutual funds can be shortlisted based on investors requirement by checking the SID on the AMC website
Mutual funds can be equity based, debt based and tax saving based also
Mutual funds can be hybrid also (equity + debt gilt/liquid funds) so that it remains stable and are also called balanced funds
Mutual funds can be according to market capitalization, sector, thematic and fund of funds.

GENERAL TERMINOLOGY

Open Ended – Entry and exit is always open
Closed Ended – Where the investment is locked for specific time.
Direct Plan – Invest directly with the mutual Fund house, reduces the operating cost of the investor.
Regular Plan – Investment through subsidiary, brokers. Increases the operating cost of the investor as this plan includes the brokerage to the brokerage house.
Expense Ratio – Annual Maintenance charge levied by the Mutual Funds.
Entry Load – Expenses incurred for starting investing in mutual fund.
Exit Load – Expenses incurred for redemption of the mutual fund.
SIP – Systematic Investment Plan. Enables you to invest on regular basis and in disciplined manner.
SWP – Systematic Withdrawal Plan. Enables you to redeem your mutual fund in a disciplined manner or as per the requirement.
STP – Systematic Transfer Plan. Enables you to transfer from one mutual fund to another mutual fund scheme
CRISIL (Credit Rating Information Services of India Limited) Rating – CRISIL rates the mutual funds. Rating of either 5 stars or at least 4 stars should be considered.
AUM (Asset Under Management) – It is the total market value of investments managed. Prefer the Larger AUM based Mutual funds
NAV (Net Asset Value) – Unit price of Mutual fund scheme.

Go to https://icraanalytics.com/Home/Mutualfunds?Type=CompFund
You will find the different categories of funds like equity, debt, hybrid etc.
Select any one of the fund heading in which you want to invest as per your end objective and risk appetite. Make sure it should be open ended.
Check the entry and exit load. It should be NIL.
Check the returns over 1 year, 2 years etc based on your period of investment.
Check the CRISIL rating, it should be 4 and above.
AUM size should be big enough.
People with high-risk appetite can invest in equity based mutual funds. The term of investment should be long term. Similarly, conservative users can have maximum holdings in the govt. bonds and other low risk instruments based mutual funds.
After selection of a fund, click on it and check the holdings.
Based on the returns, CRISIL Rating, AUM Size and holdings now you finalize your fund as per your end objective. Do not forget to compare the expense ratio.
Always try to invest in Direct Plan, it will increase your returns in long term.

To learn more about Mutual Funds and to lean about investment in Mutual funds based on your end objectives….