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In financial planning, Mutual Fund investment play a major role. Before investing in the best Mutual Fund in India, first, you should consider the pros and cons of the available resources. With so much at stake, what should an investor look for in a mutual fund? This handy 10 points guide will help you on how to pick a right Mutual Fund scheme for you.


An investment should be planned as per your needs in future. An investor should consider their age, financial needs, and family needs. Investment in equity schemes requires long-term goals, long time duration, and high-risk appetite. So it makes an ideal investment horizon for a 30-year-old investor rather than a person in their 50s. Diversification of equity & debt needs to be done considering the age of the investor.

Risk Appetite:

Investments in most securities accompany a degree of risk. A good mutual fund provides higher returns than others for an equal amount of risk taken. Achieving a balance between these factors would help you maximize your returns by taking previously calculated risks. For this, it is important that an investor analyzes their risk tolerance.

Asset allocation:

A wide-ranging portfolio usually has a lower risk exposure than a portfolio based towards one particular sector, stock, or asset category. It is wiser to allocate your assets overstocks, debt, gold, index funds, etc.


Before investing in any mutual fund scheme, you should check the long-term performance (like 4-10 years) of the fund. Then it will be easier for you to select schemes that beat their benchmark indices and compare easily with their competitors.

Strong fund house:

Before narrowing down your search to your preferred fund, select the fund houses which hold a firm goodwill in the market. These fund houses should have a strong presence and a promising and proven track record. A strong fund house will ensure efficient handling & management of your hard-earned money.

Investment Goals:

An investor usually wants to make sure that their savings enhance their ability to achieve their goals. The investment needs to be in sync with the tenure of the goal, this decides the types of mutual fund.

Invest in different Schemes:

Some investors need an FMP for market-linked returns while some may prefer to invest in ELSS for Tax benefit under section 80C. Considering your needs you might need to invest in more than one scheme.

Size of corpus:

A big corpus is considered better as bigger funds imply lower costs. This is because expenses of the fund are spread over large assets. On the other hand, this also has some shortfalls, as a large corpus becomes difficult to manage.

Exit load:

This is the charge that is charged at the time of transfer/switch between schemes or while redeeming. The exit load %age is subtracted from the NAV during redemption or transfer/switch. There are also some schemes called “No load schemes” which don’t charge any load. One needs to bear this charge in mind while investing.

Read & Understand Carefully:

“Mutual fund investments are subject to market risks, read all scheme related documents carefully”. An investor needs to attentively read the Scheme Information Document (SID).

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