How to Compare Mutual Fund Schemes?

How to Compare Mutual Fund Schemes?

Mutual Fund is a great way of investing and managing your money. This is because each mutual fund comes with a portfolio of stocks and a fund manager. So you don’t have to do all of that hard work to analyze the various stocks.

But the problem is that, After 2000, So many new mutual fund schemes have been launched in the Indian market that finding a best mutual fund that suits your financial needs is itself a job. There are literally hundreds of mutual funds in each and every category.

Now, the question is that, How to compare Mutual Fund schemes? In this article, I will show you a very short and simple method to compare various mutual funds. I will show you here that How I personally compare the various mutual fund schemes?

Well, See, you have to compare any mutual fund with the following 3 things.

01) Underlying Benchmark Index &

02) Peer Mutual Funds

03) Star Rating

Say for Example, if some equity diversified mutual fund’s underlying index is BSE 100 than you have to compare that fund’s return with the BSE 100 index. And at the same time you have to compare the return of that mutual fund to the peers means the competitor mutual funds having the same investment objective.

Remember that, You can’t compare Midcap Mutual Fund with Large Cap mutual funds. You have to compare midcap to midcap and large cap to large cap mutual funds only. Most of the people do one common mistake and that is they try to compare the returns of large cap mutual funds with the midcap mutual funds. You should not do this.

The third thing you have to compare between various same objective mutual funds is their star ratings. I personally prefer Valueresearchonline.com for checking the star ratings of the various mutual funds. However, You can go for MutualFundsIndia.com or MoneyControl.com also.

That’s it. Here you are ready to compare mutual fund schemes. No need to hire any expert financial advisor. Just keep in mind the above 3 key criteria for comparing mutual funds and believe me, you will never make any mistake…!!!