Asian Share Market, Asian Stock Market

Investment through mutual funds offers several advantages. However it pays to consider a few factors while zeroing in on a particular scheme. As mutual funds cater to different classes of investors, having diverse investment needs and expectations, you will be better of making an assessment of your investment needs and then selecting an investment avenue that meets your risk reward matrix.

Following aspects may be kept in mind while selecting various schemes such as equity, sector specific scheme, hybrid scheme, debt schemes and so on:

If you are not risk averse and want to build a healthy corpus over a period of time, equity schemes are your best bet. Equity markets have shown to have given maximum yield over longer duration and the same is applicable to equity oriented mutual funds.

If you want to take exposure to a particular sector such as power, banking, infrastructure etc., you can avail of sector specific mutual funds.

Those interested in regular and risk free income, debt funds are an obvious choice. These funds provide periodic returns in the form of dividend. However capital appreciation is not that high.

For investors willing to take moderate risk with good returns, hybrid schemes or balanced funds seem suitable. These funds invest in a basket of equity and debt instruments.

Those who want to keep their money in liquid form, money market mutual funds are a good option to choose from.

If you are inclined to use mutual funds as a means to save tax Equity Linked Saving Schemes (ELSS) are your best friend.

You can invest in an existing scheme of an open ended mutual fund based on the current NAV of the scheme. You can approach a distributor or can even directly buy from the mutual fund. You can get in touch with the concerned mutual fund through phone and you will be visited by customer service agent at your place. What a convenient way to invest! A close ended scheme which is listed on a stock exchange may also be bought based on the current market price of units being traded. In such a case, you have to approach the broker of the exchange where the unit is listed and available for trading.

One of the great myths of mutual fund investment is that NFO which is available at a price of Rs. 10 each is cheaper compared to an existing scheme, which may be available at a higher price at say Rs. 25 or even more. Remember it is not the shares which are available at Rs. 10 in an NFO. Units which are available at Rs. 10 each will invest in shares at the current market price and hence both the existing schemes and new schemes are same in that respect. In fact with existing scheme, you have the advantage of knowing their past performance and the track record of fund manager, which is a good indicator of performance of the fund in the time to come.

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