StockEdge.com
  • Products
    • StockEdge Premium
    • StockEdge Pro
    • StockEdge Club
    • Compare Plans
StockEdge Blog
  • Trending Stocks
  • Insights
    • All
    • Business Houses
    • Markets themes
    • Stock Insights
    Zomato Shares

    Zomato Shares/Stock Analysis: Profile, Financials & Growth

    Aster DM Healthcare’s Spinoff of Gulf Hospitals – A Special Situation You Can’t Afford to Miss!

    Aster DM Healthcare’s Spinoff of Gulf Hospitals – A Special Situation You Can’t Afford to Miss!

    An image charging the electric vehicle from e-station and Text written on the right side

    India’s Top Electric Vehicle(EV) Stocks

    Top 5 Textile stocks

    Top 5 Textile Stocks in India: From Cotton to Cash

    multi-bagger stocks for 2025

    5 Multibagger Stocks to keep an eagle-eye for 2025

    Jindal Saw – Strong Earnings Momentum Ahead

    Jindal Saw – Strong Earnings Momentum Ahead

    Kirloskar Group- A Legacy of 134 Years

    Kirloskar Group- A Legacy of 134 Years

    renewable energy stocks in india

    Top Renewable Energy Stocks in India

    blue chip stocks

    Top 5 Blue Chip Stocks to Buy and Invest in 2023

  • Technical Analysis
    Chart Patterns – Holy grail of Stock Market Analysis

    Chart Patterns – Holy grail of Stock Market Analysis

    StockEdge Version Update : 9.0

    StockEdge Version Update : 9.0

    Beat the street with Sector Rotation Strategy

    Beat the street with Sector Rotation Strategy

    StockEdge Version Update 8.2

    StockEdge Version Update 8.2

    Derivative Analytics

    An Insightful Research Tool For Derivative Analytics

    Introducing Put-Call Ratio a Derivative Indicator in the Market

    Introducing Put-Call Ratio a Derivative Indicator in the Market

    A Powerful Technical Indicator Beta & Beta Scans

    A Powerful Technical Indicator Beta & Beta Scans

    Technical Analysis using Edge Charts

    Technical Analysis using Edge Charts

    adaptive relative strength and static relative strength scans

    What is Adaptive Relative Strength & Static Relative Strength Scans?

  • Fundamental Analysis
    • All
    • Cash Flow Ratios
    • Efficiency ratios
    • Growth Ratios
    • Liquidity Ratios
    • Return Ratios
    • Solvency ratios
    • Valuation Ratios
    high dividend paying stocks

    Identifying High Dividend Paying Stocks

    Understanding the Importance of creating Fundamental Scans

    Understanding the Importance of creating Fundamental Scans

    Using My Combination Scan to Identify best in an Industry

    Using My Combination Scan to Identify best in an Industry

    Cost Income ratio

    Cost to Income Ratio(%)

    Cost of Liability

    Cost of Liabilities (%)

    Operating Cost to Assets Ratio (%)

    Operating Cost to Assets Ratio (%)

  • StockEdge Tutorials
    Simplify stock market analysis with Edge Reports | StockEdge

    Simplify stock market analysis with Edge Reports | StockEdge

    StockEdge Club: An Exclusive Investors Hub & Analytics platform

    StockEdge Club: An Exclusive Investors Hub & Analytics platform

    FII/DII Data: Leading Indicators of Stock Market

    FII/DII Data: Leading Indicators of Stock Market

    Chart Patterns – Holy grail of Stock Market Analysis

    Chart Patterns – Holy grail of Stock Market Analysis

    StockEdge Version Update : 9.0

    StockEdge Version Update : 9.0

    Powerful Investment Themes for Retail Investors

    Powerful Investment Themes for Retail Investors

    Beat the street with Sector Rotation Strategy

    Beat the street with Sector Rotation Strategy

    StockEdge Version Update 8.3

    StockEdge Version Update 8.3

    StockEdge Version Update 8.2

    StockEdge Version Update 8.2

  • Mutual Fund
    Top 5 Mutual Funds for 2022 where you can start your SIP

    Top 5 Mutual Funds for 2022 where you can start your SIP

    What are Value Funds and its Advantages?

    What are Value Funds and its Advantages?

    thematic funds

    Thematic Funds : Everything you need to know

    Understanding Sector Funds and their Benefits to our Portfolio

    Understanding Sector Funds and their Benefits to our Portfolio

    Are Dividend Yield Funds a good option to invest in?

    Are Dividend Yield Funds a good option to invest in?

    What are Contra Funds and their advantages?

    What are Contra Funds and their advantages?

    Trending Tags

    No Result
    View All Result
    • Trending Stocks
    • Insights
      • All
      • Business Houses
      • Markets themes
      • Stock Insights
      Zomato Shares

      Zomato Shares/Stock Analysis: Profile, Financials & Growth

      Aster DM Healthcare’s Spinoff of Gulf Hospitals – A Special Situation You Can’t Afford to Miss!

      Aster DM Healthcare’s Spinoff of Gulf Hospitals – A Special Situation You Can’t Afford to Miss!

      An image charging the electric vehicle from e-station and Text written on the right side

      India’s Top Electric Vehicle(EV) Stocks

      Top 5 Textile stocks

      Top 5 Textile Stocks in India: From Cotton to Cash

      multi-bagger stocks for 2025

      5 Multibagger Stocks to keep an eagle-eye for 2025

      Jindal Saw – Strong Earnings Momentum Ahead

      Jindal Saw – Strong Earnings Momentum Ahead

      Kirloskar Group- A Legacy of 134 Years

      Kirloskar Group- A Legacy of 134 Years

      renewable energy stocks in india

      Top Renewable Energy Stocks in India

      blue chip stocks

      Top 5 Blue Chip Stocks to Buy and Invest in 2023

    • Technical Analysis
      Chart Patterns – Holy grail of Stock Market Analysis

      Chart Patterns – Holy grail of Stock Market Analysis

      StockEdge Version Update : 9.0

      StockEdge Version Update : 9.0

      Beat the street with Sector Rotation Strategy

      Beat the street with Sector Rotation Strategy

      StockEdge Version Update 8.2

      StockEdge Version Update 8.2

      Derivative Analytics

      An Insightful Research Tool For Derivative Analytics

      Introducing Put-Call Ratio a Derivative Indicator in the Market

      Introducing Put-Call Ratio a Derivative Indicator in the Market

      A Powerful Technical Indicator Beta & Beta Scans

      A Powerful Technical Indicator Beta & Beta Scans

      Technical Analysis using Edge Charts

      Technical Analysis using Edge Charts

      adaptive relative strength and static relative strength scans

      What is Adaptive Relative Strength & Static Relative Strength Scans?

    • Fundamental Analysis
      • All
      • Cash Flow Ratios
      • Efficiency ratios
      • Growth Ratios
      • Liquidity Ratios
      • Return Ratios
      • Solvency ratios
      • Valuation Ratios
      high dividend paying stocks

      Identifying High Dividend Paying Stocks

      Understanding the Importance of creating Fundamental Scans

      Understanding the Importance of creating Fundamental Scans

      Using My Combination Scan to Identify best in an Industry

      Using My Combination Scan to Identify best in an Industry

      Cost Income ratio

      Cost to Income Ratio(%)

      Cost of Liability

      Cost of Liabilities (%)

      Operating Cost to Assets Ratio (%)

      Operating Cost to Assets Ratio (%)

    • StockEdge Tutorials
      Simplify stock market analysis with Edge Reports | StockEdge

      Simplify stock market analysis with Edge Reports | StockEdge

      StockEdge Club: An Exclusive Investors Hub & Analytics platform

      StockEdge Club: An Exclusive Investors Hub & Analytics platform

      FII/DII Data: Leading Indicators of Stock Market

      FII/DII Data: Leading Indicators of Stock Market

      Chart Patterns – Holy grail of Stock Market Analysis

      Chart Patterns – Holy grail of Stock Market Analysis

      StockEdge Version Update : 9.0

      StockEdge Version Update : 9.0

      Powerful Investment Themes for Retail Investors

      Powerful Investment Themes for Retail Investors

      Beat the street with Sector Rotation Strategy

      Beat the street with Sector Rotation Strategy

      StockEdge Version Update 8.3

      StockEdge Version Update 8.3

      StockEdge Version Update 8.2

      StockEdge Version Update 8.2

    • Mutual Fund
      Top 5 Mutual Funds for 2022 where you can start your SIP

      Top 5 Mutual Funds for 2022 where you can start your SIP

      What are Value Funds and its Advantages?

      What are Value Funds and its Advantages?

      thematic funds

      Thematic Funds : Everything you need to know

      Understanding Sector Funds and their Benefits to our Portfolio

      Understanding Sector Funds and their Benefits to our Portfolio

      Are Dividend Yield Funds a good option to invest in?

      Are Dividend Yield Funds a good option to invest in?

      What are Contra Funds and their advantages?

      What are Contra Funds and their advantages?

      Trending Tags

      No Result
      View All Result
      StockEdge Blog
      Home Mutual Fund
      5 Steps to analyze Mutual Funds for better Investments

      5 Steps to analyze Mutual Funds for better Investments

      mitali by mitali
      September 15, 2020
      Reading Time: 5 mins read
      1.3k
      VIEWS
      Share on FacebookShare on TwitterShare On WhatsApp

      Why Investors invest in mutual funds?

      Investors invest in mutual funds so that they can minimize the risks and gain maximum returns from it. However, sometimes it becomes difficult to keep track of the investment you have made and the returns that are generated from them. Hence, before you plan to take an investment decision, you must study and analyze the past performance of the instrument. If you get an idea of what to look for and what to avoid, you can not only make better investment decisions but the probability of better future performance increases.

      You must be thinking that how you are going to choose the best mutual fund for yourself? Do not worry! Take a look at the 5 steps below and analyze mutual funds for better investments. 

      1. Compare Fund Performance with Benchmark Performance

      This is one of the most important things that an investor must check if they want better investments from mutual funds. Every mutual fund scheme sets a benchmark that it intends to surpass. The performance of a specific fund should be compared with the performance of the corresponding benchmark for the fund.

      Suppose you have invested in a mutual fund scheme, and after a year you see that the total returns provided by the scheme are 15%. But then you find out that the benchmark for the fund generated a return of 20%. This indicates that if you had invested in the benchmark index then you had have made 5% more. This is the reason why you should compare fund performance with benchmark performance.

      2. Analyze the mutual fund portfolio

      It is important to analyze whether the fund manager is investing your money in small or big companies. Mutual funds are said to be an integration of debt and equity and a fund manager must concentrate on both so that they can diversify the risks. Now, you might think that how will you analyze the portfolio? It is very easy! You can understand the portfolio by considering the top holdings which have stocks that can be easily identified. The top-performing stocks will help you to analyze the overall portfolio and will also drive superior returns on your investments.

      3. Know about good and bad performance

      If you are planning to invest your money in a mutual fund then you must hold it for at least three years. However, this doesn’t mean that short-term (for example 1 year) returns are petty. The fund that has performed well in a year might not perform equally well if it is held on till three or more years. Also, short-term mutual funds are difficult to manage and attract higher investment when compared to long-term funds.

      Hence, abnormally high returns do not necessarily mean that the performance is good. Another reason why you should stay away from a high short-term performance because it attracts more assets to the fund and more assets can disrupt the future performance of the mutual funds.

      4. Consider Market and Economic Cycles

      An investor must understand the highs and lows of the mutual funds market. He/she should also understand the impact of economic changes on the fund. It is recommended that you talk to investment advisors or fund managers so that you can get a clear picture of the funds market like whether long-term mutual funds are better than the short ones, and gain insights into how the market changes have impacted the returns. Also, before you finalize an investment advisor or fund manager for yourself, don’t forget to check their performance history and experience.

      5. Expense Ratio

      The expense ratio indicates the percentage of total assets a mutual fund charges an investor yearly in order to manage his/her portfolio. Some of the expenses that are related to mutual funds are distribution charges, management charges, fund service charges, security transaction fees, and so on. Mutual fund plans are of two types – Direct and Regular plans.

      Direct mutual funds do not charge distributor commission as well as other fees since you can buy these plans directly from the mutual fund company. Contrarily, regular mutual fund plans charge distribution fees as well as other charges. This is because regular mutual funds are sold via brokers or other distributors.

      These charges increase the expense ratio of the regular mutual funds and make it more expensive than the direct mutual fund schemes. Hence, it is suggested that the investors compare the expense ratios of the various mutual funds before they choose one. 

      In simple terms, the expense ratio tends to decrease the returns that are available to an investor. Let us assume that a fund earns returns equal to 12% and has an expense ratio of 3%, then you would earn a return that is equal to 9%. A low expense ratio results in more profit whereas a higher expense ratio means less profit. The best mutual funds are those that have a low expense ratio.

      Conclusion

      Gain complete knowledge about different investment options before you choose where to invest. Hence, thoroughly analyze the performance of each mutual fund and then finalize the best one. 

      mutual funds

      Also Read : Shares or Mutual Funds – Which one is better for Investment?

      Why ELSS Mutual Funds is the most preferred Mutual Fund Investment?

      ShareTweetSend
      Subscribe On Telegram Subscribe On Telegram Subscribe On Telegram
      Previous Post

      Update to the latest version of Stockedge

      Next Post

      How to use Sharpe Ratio to analyze mutual funds?

      mitali

      mitali

      https://secure.gravatar.com/avatar/74d602fa4ca0579c73e52aff2826e474?s=96&d=mm&r=g

      Next Post
      How to use Sharpe Ratio to analyze mutual funds?

      How to use Sharpe Ratio to analyze mutual funds?

      2 year and 5 year Price Breakout Scan

      2 year and 5 year Price Breakout Scan

      How to use Jensen’s Alpha to evaluate mutual funds?

      Treynor Ratio: Evaluating Mutual Funds

      Contact Us
      • Timing (Mon-Sat): 10 am to 7 pm
      • Sales: +919830994463
      • Support: +919830994402
      • Club Support: +916289906895
      • Affiliate: +917003567131
      Recent Posts
      All About NIFTY50, Components of NIFTY50, and How to Invest in it
      Simplify stock market analysis with Edge Reports | StockEdge
      Important Links
      • StockEdge.com
      • StockEdge Premium
      • - Quarterly Membership
      • - Annual Membership
      • StockEdge Analyst
      • StockEdge Club
      • Compare Plans
      An Initiative Of

      © 2023 Kredent InfoEdge Pvt Ltd.

      Facebook-f Twitter Instagram Linkedin-in Youtube Pinterest-p

      Get StockEdge App

      No Result
      View All Result
      • Home
      • Article Categories
        • Fundamental Analysis
        • Technical Analysis
        • Market Themes
        • StockEdge Tutorials
        • StockEdge Version Updates
      • Products
        • StockEdge Premium
        • StockEdge Pro
        • StockEdge Club
        • Compare Plans
      • Visit StockEdge.com

      © 2023 Kredent InfoEdge Pvt Ltd.

      ELM School

      Premium or Pro or Club?

      The market is back in decent shape and the good time to invest in stock is finally here.
      Become a smart investor with a stunning deal! Use code DEAL30 to get any plan at 30% flat discount

      GET YOUR PLAN