Are You Investing in the Best Mutual Fund AMC in India?
Do you have an investment in mutual funds? Are you sure that the fund house you have chosen is the best one? No? Let us help you be assured! Buying a mutual fund is not a difficult task in the present era as there are various advisors and online portals which are helping one in making investments easily.
But, to buy a right fund is as important as having a right meal. If you don't park your money in an apt mutual fund scheme, you won’t be able to gain the best advantage of the industry. For that, the prime factor is choosing the right AMC, i.e., the Asset Management Company. Here are some of the questions you should ask yourself to assure that the AMC in which you have your investment, or where you intend to invest in the future is the best one for you.
1. What is the Investment Philosophy of the AMC?
It is of vital importance to comprehend the business strategy and investment philosophy adopted by the fund house. Every AMC has its own team of researchers which is indulged in developing business models as per the market trends and experience held by the members. You must analyse the AMC’s philosophy to evaluate whether you can achieve your goals with them or not. Suppose the AMC has a risk-taking nature and tends to invest in highly volatile investment avenues but you are a risk-averse, then it won’t be safe for you if you opt for the same for your portfolio.
2. Does Its Investment Objective Match with Yours?
The AMCs have a variety of investment schemes which are categorised into three broad categories. Every class of asset has its own investment objective, and it is up to you to choose the one which matches your requirements and goals.
3. What is the Asset Allocation Strategy of the AMC?
The most important factor which lets your investment gain wealth or losses is the portfolio concentration. It is of very important to know the strategy adopted by the AMC in terms of designing the portfolio of the schemes. As per the nature of the fund in which the money has to be invested, there must be adequate allotment of the funds so that the returns can be assured. If you cannot understand the reasons behind their strategies and cannot find them suitable, then it’s of no sense to buy those schemes.
4. Does the Fund Managers Possess Adequate Knowledge & Skills?
It is known to all that at the end of the day, the money that you invest in mutual funds is handed over to the fund managers. They are the in-charge of your money and have the right to mould it wherever they want. Hence, before choosing an AMC, you should assure that the fund manager of the schemes in which you intend to invest in has the required knowledge, experience, and skills to manage the fund in the best way.
5. How Have the Funds Been Performing in the Past?
Although past performance of the schemes doesn’t guarantee future returns, they give an idea about the potential of the funds to perform in the future. When choosing the fund house, you must verify that the schemes of the AMC have better performance track record or not. The return factors of newly designed plans can be ignored but the ones which are in existence for a long time must have a considerable track record in the market.
6. Are the Loads & Other Expenses Worth Paying?
The investments in mutual funds carry different cost factors which include the loads, expenses like brokerage, commission, management expenses or so on. One must analyse the cost payable to evaluate its worth. If you can find the justification for the expenses incurred and satisfied with the results, then it would be worth paying. Else, it’s better to not go for the same.
Hence, you can easily get to know whether you have chosen a correct AMC for your portfolio or not. If you find that the fund house is suitable for your requirements and matches them completely, then you must consider the same.
At MySIPonline, we provide details for all the AMCs in a broader way to help one in buying the right fund for their portfolio. You can evaluate the same and find the best asset management company to start your investments.
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