How I can under stand of best mutual fund plan ?

Question

Not else

Answer 1

Hi,

Refer to this post about mutual funds:

http://where-to-invest.blogspot.com/2008...

Answer 2

Your question is about identifying the best mutual funds. I have given specific ideas below. But before that I thought it useful for you to consider how can you best allocate your money, and how best to make your money grow.

There is nothing like starting early, in your investing life and use the power of compounding to your advantage. To understand power of compounding, consider this excellent article at http://www.valueresearchonline.com/story...

Next, you can invest in a mix of the following strategies, depending on your investing risk profile, as indicated below. Invest only those funds that you do not need. Get in the habit of saving 30-35% of your salary regularly. Create an emergency fund, roughly equal to 4-6 months of regular monthly expenses. Once this is covered, you may have funds that you will not need say for next 3-5 years for regular or emergency expenses. Use these funds to invest wisely. You need to remain invested for the long term, since you want capital growth.

Conservative Risk Profile (you seem to be of this type; someone who wants his principle to be secure and is looking for a decent growth over the long term)

1. PPF (Public Provident Fund) - account can be opened with any State Bank of India branch. This gives you a compounded 8% return per year, is currently tax free, and is the safest instrument available. Invest 50% of sparable funds in that

2. A Balance fund like HDFC Prudence Fund - This Mutual Fund invests in both equity (65%) and debt (35%) instruments. This is one of the safest funds with a great track record of over 14 years, and has been giving a compounding return of around 20-25% per year. This fund has one important virtue: it manages to lose less than the category average in periods of downside. Couple this with its tendency to top charts & you get a safe & sure fund in HDFC Prudence. Invest 30% of the funds in HDPC Prudence.

check out HDFC Prudence fund analysis at

http://www.valueresearchonline.com/funds...

3. Equity Diversified MF -like SBI Magnum Contra, Reliance Growth.

These are funds having a very good long term record in delivering great returns with low to average risk. They have figured among the top fund ratings for a very long time. Invest the balance 20% in funds like these

Check out more on the top rated funds at http://www.valueresearchonline.com/topra...

Moderate Risk Profile (someone who can take a little more risk with some of his money)

PPF -40%; HDFC Prudence -30%; SBI Contra or Reliance Growth fund -30%

Aggressive Risk Profile (someone who can take higher risks with some of his money)

PPF-20%; HDFC Prudence -30%; SBI Contra or Reliance Growth - 50%

Go through the very informative articles at Value Research online website. Identify a fund, check its track record, read its fund analysis, see if the fund manager is a long standing one, and then decide on the fund to choose. You may take all the ratings and anything that you read with a small pinch of salt, as past performance is no guarantee of success. Invest and monitor regularly, perhaps every 6 months or so.

Good luck

Answer 3

There is no one best fund, however I have a personal affinity for Vanguard funds.  (I am a private investor, not a member of Vanguard or a salesperson for their products).  The reason I like V is that their focus includes having the lowest expense ratios of any funds in various categories.  If a fund returns 8% but has a 2% expense ratio then the net return is 6%, before taxes.  Vanguard has a lot of index funds that run around .2%.  Morningstar.com has rating information on their various funds, as well as those for many other reputable companies (T Rowe Price, Fidelity, etc.).  It is also a lot easier to diversify these days.  One V fund (the STAR fund) is a mix of stocks and bonds (60/40) and has a $1000 minimum investment so almost anyone can start investing in mutual funds that way.  Good luck.