Best Mutual Fund

“I want to invest in mutual fund (Equity Fund) through SIP , I prefer SBI MF pls give me ur opinion abt this fund.
I would also like to know whether we should opt Dividend or Growth Facility , I prefer to invest on a long term basis pls suggest me "details regarding investment duration .I would als like to know which is the best fund SBI MF or UTI MF.”

Well, Here you want to invest in SBI Mutual fund because you think that SBI is a good mutual fund. And you have also asked me that which is the best fund, SBI MF or UTI MF.

Well, Here i want to tell you that, most of the people have a false belief that, they have to see the fund house for their investments. But it is not true. The fund house has nothing to do with the returns of individual schemes. If we talk about SBI MF than it has several Equity Schemes. But only few are effective. The same is true for UTI fund.

Basically we look for management team in any mutual fund scheme.

I usually prefer those schemes which have a proven past record of at least 3-5 years. Let me suggest you one best website which will give you all the details about Indian Mutual Funds.

Valueresearchonline.com

This site gives every mutual fund scheme, a star rating. 4-star or 5-star rated funds are the best choice for investment. They don’t only see the performance of the fund while rating any fund but they check literally hundreds of criterias before rating any fund such as fund manager, investment strategy, advanced portfolio statistics, fund beta ratio, alpha ratio, R, and many other statistical parameters.

Now let us talk about SBI MF.

In SBI MF, right now the following equity schemes are 4-star or 5-star rated.

- SBI Magnum Contra – 5 star

- SBI Magnum Equity – 4 star

- SBI Magnum Multiplier Plus – 4 star

So if you want to invest in SBI’s Equity Schemes than please invest in the above 3 schemes only. Because according to Valuresearch, not the all the Equity schemes from SBI are Investment worthy.

Now let us talk about UTI MF.

In UTI MF, following Equity schemes are 4-star or 5-star rated.

- UTI Equity – 4 star

- UTI Infrastructure – 4 star

- UTI Mastershare – 4 star

So you, me or anyone can’t comment on the over all fund house. Every fund house has few schemes which are 4-star or 5-star rated and only those schemes are investment worthy.

Here is a Full list of all the 4-star & 5-star rated Equity schemes from all the fund Houses by Valueresearchonline

So as a rule of thumb, “Start doing SIP in some good 4-star or 5-star rated equity diversified mutual fund of any fund house having past record of 3-5 years. Of course if the scheme is rated 4-star or 5-star than it must have a proven past record of more than 3 years.”

Every year review the fund rating and rebalance your portfolio accordingly. According to me, any portfolio’s core fund should be 4-star or 5-star rated Equity Diversified funds only. I do not prefer Sector/thematic funds.

Dividend versus Growth Option -

Well, Here are the 2 great informative articles that will solve your query.

01) Growth or Dividend? – This article is all about the basic difference between Growth, Dividend & Dividend Re-investment option. Actually Growth & Dividend re-investment are the same thing.

02) Growth Versus Dividend Re-investment – This is another informative article. Just read this article and you will get all the answers of your query.

Investment Duration -

You have also asked me for the details regarding the Investment duration. Well, no need to say that, “Longer is better.” This is because of the Compound Interest. Remember, Investment is not a game of money only. It is a game of money & time both. So unless you invest both of these elements in extreme proportions, you can’t be extremely wealthy.

So Invest Money & Time both vigorously. Do SIP with as much money as possible. And give as much time as possible (Such as 5,10,20,40 years or even more….!!!) to grow those investments.