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Understanding Mutual Funds

You can use the Value Research fund classification to understand what different funds hope to achieve…

I am new to investing in mutual funds and don't know much about the intricacy of it. So how should I do my research and what should be the parameters which I should see before choosing any mutual fund?
- Anup

Agarwal

Welcome to the world of mutual fund investing. Your inquisitiveness to invest in mutual funds will take you a long way. A first step to understanding mutual funds will be to understand the Value Research mutual fund classification. The basis of the classification is to group funds with similar traits and bring homogeneity among funds within a category allowing logical comparison amongst peers and categories. The fund classification, brings in objectivity when understanding what each category of funds hope to achieve.
Building a portfolio based on the Value Research classification is a good starting step. The risk-return reward for each category varies and having an understanding of the same will help you allocate your investments into different categories. You can then use the Value Research star rating to select the relatively better funds within the category. The star rating is based on risk-adjusted rating system and acts as the first filter in fund selection. A higher rating indicates good performance and one should ideally look for funds that have consistently carried high ratings. You can start building a portfolio of mutual funds based on these parameters and read on various strategies that one can adopt when building a mutual fund portfolio on our website.



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