These six litmus tests will form the cornerstone of your mutual fund selection. Broadly, performance and consistency of performance matter at the end of the day. But above all, remember the golden rule. It is not just how good the fund is that matters. It is how good the fund is for you that really matters!✔ï¸Consistency• Be wary of a fund that has seen a considerable churn• past cannot be a deciding factor for the future• Funds that are continued for the past 5-10 years✔ï¸Fund manager• Sharpe Ratio and Treynor Ratio calculate risk-adjusted returns• Fama measure explains how much returns were generated by chance• fund manager should be working hard to beat the market✔ï¸Expense ratio • Select funds that offer performance with the lowest ER• Matters a lot in debt funds or equity funds in the long term• Index fund had saved billions in the form of lower ER✔ï¸Diversification• Reduces risk by allocating investments in sectors • Decreases the amount of time spent monitoring• Allows you to swap between investments✔ï¸Size of scheme and AMC • Larger funds with bigger AUMs stay for longer term• Smaller funds are more vulnerable to shocks• Foreign AMCs have exited their India operations⬇ï¸Download the app now! - MO Investor App👉 Research 360 App🔗 For disclaimer, visit our Share this with your investing or trading buddy.🔖 Save this post for future reference.â˜‘ï¸ Follow @motilaloswalgroup for more knowledge-based content. #linkinbio #MotilalOswal #KnowledgeFirst #litmustest #mutalfund #stockmarket #stockmarketinvesting #experttips #chooserightstocks #investmentadvice #stockratings #stockanalysis #technicalresearch #marketanalysis #expertadvice #investingtips
These six litmus tests will form the cornerstone of your mutual fund selection. Broadly, performance and consistency of performance matter at the end of the day. But above all, remember the golden rule. It is not just how good the fund is that matters. It is how good the fund is for you that really matters! ✔ï¸Consistency • Be wary of a fund that has seen a considerable churn • past cannot be a deciding factor for the future • Funds that are continued for the past 5-10 years ✔ï¸Fund manager • Sharpe Ratio and Treynor Ratio calculate risk-adjusted returns • Fama measure explains how much returns were generated by chance • fund manager should be working hard to beat the market ✔ï¸Expense ratio • Select funds that offer performance with the lowest ER • Matters a lot in debt funds or equity funds in the long term • Index fund had saved billions in the form of lower ER ✔ï¸Diversification • Reduces risk by allocating investments in sectors • Decreases the amount of time spent monitoring • Allows you to swap between investments ✔ï¸Size of scheme and AMC • Larger funds with bigger AUMs stay for longer term • Smaller funds are more vulnerable to shocks • Foreign AMCs have exited their India operations ⬇ï¸Download the 👇 apps now! MO Investor app: https://bit.ly/MOInvestorApp-FBResearch360 app: https://bit.ly/Research360App_FB🔗 Disclaimer: http://ow.ly/63nS50Lqpleâ£ â–¶ï¸ Share this with your investing or trading buddy. 🔖 Save this post for future reference. â˜‘ï¸ Follow us for more knowledge-based content. #MotilalOswal #KnowledgeFirst #litmustest #mutalfund #stockmarket #stockmarketinvesting #experttips #chooserightstocks #investmentadvice #stockmarket #stockratings #stockanalysis #technicalresearch #marketanalysis #expertadvice #investingtips #MotilalOswal #KnowledgeFirst #litmustest #mutalfund #stockmarket #stockmarketinvesting #experttips #chooserightstocks #investmentadvice #stockratings #stockanalysis #technicalresearch #marketanalysis #expertadvice #investingtips
