How to select a mutual fund?

1. goals for investing - what are your goals? Are you saving for retirement, a down payment on a house, or something else? How long do you have until you need the money?
2. How much risk are you comfortable with or can you take? If you're at a young age, you may be able to take high risks. If you're older and nearing retirement, you may want to choose a low-risk fund.
3. There are many mutual funds, each with its own risk and reward profile. You'll need to choose a fund that's appropriate for your financial goals and risk tolerance.
4. Check the performance of the peers over the years.
5. Check the expense ratios. Lesser the expense ratio, more profit and less fees.
6. Check the liquidity and size of the fund.
7. Assess the fund manager's experience and track record.
8. Read the policy document carefully to assess the investment objective, risk profile, and fees.
9. There are top rating agencies that rate mutual funds issued by companies. Check the ratings of the mutual funds and their peers to invest.
10. Check the holdings and asset allocation of the fund to which sector the funds give more returns.

Ways to invest in a mutual fund:

Several mutual fund options exist to ease the complexities associated with it.

1. Through Online Portals:

There are a number of third-party online portals which allow you to buy various mutual fund schemes across AMCs. Most of these portals have links with banks to enable smooth transfer of funds at the time of investment.

Some organizations like Zerodha, up stock and Groww offers internet platform for buying direct funds without levying any charges on the same. It’s a costless and paper-free means. This is the most ideal and simplest method for investing in MFs.

2. Through intermediaries:

There are a range of intermediaries exist. These include almost all banks, distributors that are either national/regional players, some stockbrokers (including online brokers) as well as many individuals and small financial advisory companies. All intermediaries must be registered with AMFI (Association of Mutual Funds in India), which also has a searchable online directory at www.amfiindia.com.

3. Through IFA’s:

IFAs are individual Financial Advisors who act as agents for facilitating a mutual fund investment being made by another person. They assist you in filling out the application form and even submit it along with the AMC’s office.

4. Directly with the AMC:

You can invest in a mutual fund scheme by making a direct investment through the AMC. First investors may need to visit AMC’s office to make their investments into any mutual fund.