<img class="gwt-Image" src="/photo/51876846.cms" />If you are looking to invest in a <keyword id="6354820" type="ORGANIZATION" weightage="20" keywordseo="mutual-fund">Mutual Fund</keyword> (MF), you will find one that will match your needs but with so many companies, each with so many schemes, it will be a difficult journey to find one that fits the requirement.<br />
<br />
Here, we will focus on a few parameters that will help you in choosing the right mutual fund for investment depending on an individual’s requirements.<br />
<br />
Ø <strong>Identify the objective</strong>: Like stated before, there is a right kind of mutual fund for everyone and every need. So, the first thing one needs to do is identify their objective for <keyword id="35175" type="UNKNOWN" weightage="20" keywordseo="investing">investing</keyword> in the mutual fund. This can be based on the timeline for investment (short or long term) or the financial goal. For instance, if Asha is looking to invest in a mutual fund to save tax; an Equity Linked Savings Scheme (ELSS) will suit her requirements, while Mr. Mehta is looking for a regular flow of income so for him a Monthly Income Plan (MIP) is required. So the first step is to be sure about the reason for investing in a MF so that you can focus on that segment and choose a scheme that suits you best. You can have multiple funds to satisfy one objective or different fund to meet different kinds of goal.<br />
<br />
Ø <strong>Asses your Risk Appetite</strong>: Mutual funds are managed by professionals and generally these professionals base their decisions on extensive research. However one cannot forget the MFs are market linked products which means they are susceptible to market risk and they do not have guaranteed but have indicative returns. So before choosing a scheme it is important to understand if it matches your objectives and whether it matches your risk appetite also or not. Equity funds are high risk and high returns, while debt funds lie on the other end of the spectrum. Balanced funds as the name suggests lie somewhere in between. Generally those in advanced years do not prefer equity oriented schemes while the younger investors can afford to invest in equity funds and take some risk.<br />
<br />
Ø <strong>Focus on History: </strong>As stated earlier, MFs are market related instruments so there can be no guaranteed returns. Even for debt funds the returns are indicative; so how does an investor decide if the fund will deliver what it promises in terms of returns? This can be assessed to an extent by looking at the past performance which can be indicative of the expected future returns but again there is no surety that in the future also a similar pattern will be followed. Looking at the past returns can help in assessing a trend that a mutual fund follows in terms of returns.<br />
<br />
Ø <strong>Use Statistics: </strong>Apart from returns, certain other numbers are also important when choosing the right mutual fund. Alpha is one such indicator; it is a measure of MF’s performance on a risk adjusted basis and as compared to the benchmark. A positive alpha indicates that the fund is doing well. Beta is the measure of fund’s volatility as against the benchmark. It measures the fund’s sensitivity to changes in the market. For an investor with low risk appetite a fund which has a beta value less than one is the right choice and the opposite is true for those are willing to have a bigger risk appetite. Standard deviation in terms of a MF will indicate its volatility; how much the returns deviate from the expected returns calculated based on the past performance. An investor should also keep an eye on the various costs that he/she incurs as these costs ultimately impact the overall profitability of a mutual fund.<br />
<br />
Ø <strong>Pedigree is Important</strong>: Another factor that one should focus on while selecting a mutual fund is the fund house that is promoting it and who the fund manager is. Choosing a well known and experienced fund house will ensure that they will not indulge in unethical practices or will go bust while leaving you in the lurch. A fund manager decides which instruments or securities to invest in so an experienced and knowledgeable fund manager will ensure that you get good returns on your investments. Being preemptive and not reactive is what distinguishes a good fund manager from an average one.<br />
<br />
The above factors can hopefully help you in choosing the right mutual fund for yourself which not only helps you in meeting your financial goal but is also a safe and profitable investment.<br />
<br />
(Rajiv Raj is the Director and Co-Founder of www.creditvidya.com)<br />
<br />
(Image: ThinkStock)<br />
 <br />


Here are 5 ways that will help you zero on the right mutual fund

<p><strong><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5c0ae82b38e17324c617f2f8-1372/jack bogle.jpeg" border="0" alt="Jack Bogle Vanguard" data-mce-source="Wiley" data-mce-caption="Vanguard founder Jack Bogle" /><p class="source"><span>Wiley</span></p><p class="caption">Vanguard founder Jack Bogle</p></div><p></p></div></div></strong></p><ul class="summary-list"><li><strong>Jack Bogle wrote his senior thesis at Princeton University about the concept of open-end mutual fund companies. </strong></li><li><strong>The thesis would lead to his first job, and some of the principles would become the foundation for Vanguard, which now manages $5.1 trillion. </strong></li><li><strong>At the time, mutual funds only oversaw $2 billion. Now, the industry counts $21 trillion of assets. </strong></li></ul><p>Jack Bogle's senior thesis led to an A+ grade, a job offer, and the foundation for what would become a $5.1 trillion company. </p><p>As a Princeton University student, Bogle found inspiration for his thesis while flipping through the December 1949 issue of Fortune magazine, he detailed <span>in a book released Thursday, </span><a href="https://www.amazon.com/dp/B07KRVY5FZ?tag=bisafetynet2-20">"Stay the Course: The Story of Vanguard and the Index Revolution."</a></p><p>The article described an unfamiliar business: an open-end fund company, which continuously offers shares for sale, with shares redeemable on demand. The piece chronicled the history of the first such company, Massachusetts Investor Trust, which was founded in 1924 and now does business as MFS Investment Management.</p><p>Bogle's interest was piqued, so he spent the next 18 months researching what became a senior thesis on the history and future prospects of open-end investment companies - the then-standard term for mutual funds. He fell "madly in love with the subject," he wrote. </p><p>"I was convinced that the 'tiny' $2 billion mutual fund industry would become huge, and would remain 'contentious,'" he wrote, quoting language from the Fortune article. "I was right on both counts: today's $21 trillion mutual fund colossus is among the nation's largest and most dominant financial sectors." </p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/vanguard-founder-bogles-success-story-2018-12">Vanguard's founder nearly failed out of Princeton and was fired from his first company. Here's how he went on to lead a $5.1 trillion firm.</a></em></p><p>His 130-page thesis, "The Economic Role of the Investment Company," concluded that such investment companies should be operated as efficiently, honestly, and economically as possible, with future growth maximized by reducing sales charges and management fees. Among his other principles, he said that companies should focus on managing their investment portfolios and serving shareholders, and that they should exert influence on corporate policy. </p><p>"Mutual funds seem destined to fulfill this crucial segment of their economic responsibility," he wrote. In the year ending June 30, Vanguard engaged with 721 companies under its investment stewardship program, according to its annual report. </p><p>"Yes, there was a lot of idealism in those conclusions. But, barely out of my teenage years, I was a typically idealistic scholar," Bogle wrote.</p><p>"Six-plus decades after I first read that Fortune article, my idealism has hardly diminished. Indeed, likely because of my lifelong experience in investing, that idealism is even more passionate and unyielding today. There's little question that many of the values I identified in my thesis would constitute the core of Vanguard's remarkable growth." </p><p><strong>Read more:</strong> <em><a href="https://www.businessinsider.com/firms-vanguard-founder-jack-bogle-admires-2018-12">The man who upended investing by founding $5.1 trillion Vanguard says he admires only 3 rivals, and even made some money off 1 of them</a></em></p><p>The thesis earned Bogle an A+. It also impressed the founder of an investment company - Walter Morgan, another Princeton alumnus - who offered Bogle a job at his firm, Wellington Management Company. Bogle would rise to be Morgan's successor as chief executive officer at age 35, before <a href="https://www.businessinsider.com/vanguard-founder-bogles-success-story-2018-12">being fired and then founding what would become Vanguard</a>. </p><p>Today, Vanguard oversees $5.1 trillion and employs more than 40,000 people. </p><h2>Read more: </h2><section><ul><li><a href="https://www.businessinsider.com/vanguard-founder-bogles-success-story-2018-12"><span>JACK BOGLE: 'Main Street hasn't been taking its fair share'</span></a></li><li><a href="https://www.businessinsider.com/buffett-jack-bogle-is-going-to-save-american-investors-100s-and-100s-of-billions-2017-5">BUFFETT: Jack Bogle is going to save American investors '100s and 100s of billions'</a></li><li><a href="https://www.businessinsider.com/jack-bogle-investing-advice-millennials-2017-4">The investing advice Jack Bogle gave Tony Robbins for 20-somethings is useful for just about anyone</a></li></ul></section>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/gary-shilling-legendary-economist-trade-war-outlook-says-us-will-win-2018-10">The legendary economist who predicted the housing crisis says the US will win the trade war</a></h3>        <div>            <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/xUxxJSS6-xjRU7l6Z.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script>        </div>    </div>

How the founder of $5.1 trillion Vanguard built his firm from his Princeton thesis

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/58b44c7401fe5851008b6b27-2400" alt="Donald Trump" data-mce-source="Getty Images" data-mce-caption="Donald Trump." /><p class="source"><span>Getty Images</span></p><p class="caption">Donald Trump.</p></div><p></p></div></div>In the early days of his administration, President Trump's attention has been focused squarely on international trade and immigration, which has created concern among investors that aggressive revisions to existing trade and immigration policy could make the United States a less inviting place for both labor and capital.</p><p>Additionally, there are general concerns that whatever fiscal policy emerges from the new administration will take longer to unfold and be smaller than the markets have priced in to date. For investors keeping a keen eye on these policies and how they may impact growth, what are the potential impacts of tapering the supply of labor and capital into the US?</p><p>Trump has been quick to sign a flurry of executive orders, withdrawing from the Trans-Pacific Partnership, advancing his plans for a wall on the US-Mexico border and implementing a number of immigration restrictions. Talk of import tariffs, aimed at some of the America's largest trading partners, has also taken center stage. These policies have the potential to hamper US economic growth. Given the declining growth rate and aging US labor pool, cutting off the flow of immigrants could lead to a drop in both economic potential and dynamism.</p><p>Immigrants coming to the United States tend to be young, and the vast majority of them flow directly into the work force. For example, Hispanics, who make up the majority of migrants, are both younger than the US median and participate in the labor force at a higher rate, according to the Pew Research Center. Recent studies examining developed world labor markets suggest that as work forces age, they become less productive, vibrant and entrepreneurial.</p><p>Additionally, concern is growing that the H-1B visa program will be reformed, making it more difficult for US technology firms to recruit highly skilled workers from overseas. Demographically, the US has until now fared better than most developed countries given previous immigration levels. But a significant shift in policy could eventually see the US economy slide back into the pack with the rapidly aging and sclerotic eurozone and Japan.</p><p>A realignment on trade policy could negatively impact growth, both in the US and globally. President Trump has threatened to impose a 20% tariff on imports from Mexico, ostensibly to fulfill his campaign pledge that Mexico will pay for a border wall. Over the decades, the US Congress has ceded a great deal of power to the executive branch in the international trade arena, and thus Capitol Hill would not be a near-term impediment if the administration chooses this policy path.</p><p>Such a tariff could have severe effects on the Mexican economy, and would likely negatively impact US multinationals with operations south of the Rio Grande. Furthermore, Mexico is the third largest trading partner of the US, accounting for approximately 13% of trade. If US-imposed tariffs on Mexican imports lead to a significant deterioration in trade between the two countries, not only could hundreds of thousands of jobs - in both countries - be at risk, but the prices of many goods sold in the US would likely rise.   </p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/588bf94d713ba157008b52d2-1024" alt="US-Mexico border wall" data-mce-source="Sandy Huffaker/Getty Images" data-mce-caption="A Border Patrol vehicle sits along the U.S.-Mexico border wall on January 25, 2017 in San Ysidro, California." /><p class="source"><span>Sandy Huffaker/Getty Images</span></p><p class="caption">A Border Patrol vehicle sits along the U.S.-Mexico border wall on January 25, 2017 in San Ysidro, California.</p></div><p></p></div></div>The Trump administration has also leveled charges of currency manipulation at China, Japan and Germany. All have countered the allegations, with China having the strongest case, as it has spent nearly $1 trillion over the last 18 months to support the yuan. Meanwhile, Japan says that it's acting within the G20 agreement to avoid competitive devaluation by conducting monetary policy for domestic purposes in order to stave off deflation and German chancellor Merkel asserts that monetary policy is the purview of the ECB and Germany will not question its independence. The new US administration's rhetoric is only increasing the likelihood of beggar-thy-neighbor currency wars, or worse, an all-out trade war, with the US against the world.</p><p>Given the slow-growing, highly indebted state of the global economy, it's not inconceivable that trade battles could tip the world back into recession, or perhaps worse. Under such a scenario, risky assets would likely run into turbulence at a time when central banks have few weapons left in their arsenals.</p><p>Though it may be unfashionable to say so, it's important to note that tariffs are not always associated with bad outcomes. Indeed, for the first 150 years of its existence, the United States was actively protectionist, yet all the while advancing toward superpower status. More recently, the Asian tigers have followed a similar path. However, with global tariff rates so very low, changing direction dramatically could prove tumultuous.</p><p>So, while taking steps toward a more level playing field in trade policy and reexamining the goals of immigration policy are not unreasonable aims, one hopes the new administration considers the potential adverse consequences of pushing too far too fast. Moving precipitously on tariffs risks slowing, or even reversing, the persistent flow of labor and capital into the United States that has consistently made the US among the most vibrant and flexible economies in the developed world.</p><p><em><span>Erik Weisman is chief economist at MFS Investment Management.</span></em></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/sears-failing-store-edward-lampert-bankrupt-retail-2017-2">We went inside a Sears and saw why the company is dying</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="lvdWVqOTE60A4mxmHwiRG5jwlMIldWdp" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'lvdWVqOTE60A4mxmHwiRG5jwlMIldWdp',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

You Searched For "focused MFs" and got 3 results

Here are 5 ways that will help you zero on the right mutual fund

Rajiv Raj

How the founder of $5.1 trillion Vanguard built his firm from his Princeton thesis

Meghan Morris

Trump's protectionism could tip the world back into recession

Erik Weisman, MFS Investment …