–Mohsin Bhukera
It seems you are new to mutual funds. If you don’t understand much about investing in mutual funds, you should hire the service of a professional. You can seek the help of a mutual fund advisor or financial planner, depending on your needs.
Always choose mutual funds based on your goals, investment horizons, and risk profile. Always invest in debt mutual funds to achieve your short term goals. For long-term goals that are at least five to seven years away, you can consider investing in equity mutual funds. When it comes to equity funds, you can choose actively-managed mutual funds or passive funds or index schemes. If you think a fund manager can offer you extra returns over benchmarks, you can opt for active schemes. If you think nobody can beat benchmarks consistently over a long period, you can opt for index schemes. However, don’t feel bad if actively-managed mutual funds offer extra returns, especially in a bull phase. The idea behind opting for index schemes is to be happy with hassle- free benchmark returns. However, you should always choose your index schemes based on your risk profile. A conservative investor can opt for a large cap index like Sensex or Nifty. Similarly, aggressive investors can opt for mid cap or small cap index schemes. You can also opt for a combination of index schemes to achieve your desired allocation. Always choose a scheme with low tracking error or low expense ratio.
