What is the best mutual fund available in market?

Question

I have decided to invest Rs.50,000 in mutual funds. Which ones are the top 5 ones, from the following point of view: Reasonably consistent results, reliability, quality and promptness of service. Thanks.

Answer 1

If you're looking to evaluate mutual funds, use morningstar. If you're looking for what to do going forward, read on.

Mutual funds are appropriate for some and the wrong investment for a growing number of people.

Put another way, I would NOT invest in mutual funds if it weren't for having a 401K.

Overall, Mutual funds are not good (once you're educated about them) and you should not invest in mutual funds unless you have to (like if it were a requirement in a 401K).

Here's why.

First of all, mutual funds exist to take average person's money.

Second, mutual funds seem to be "happy" just to do better than the S&P index, since that's often the gauge. A monkey, yes monkey, can usually outpick most mutual funds. As was stated over 80% of the mutual funds out there can't even outperform the market. That's VERY SAD!

Third, mutual funds have embedded management fees in their costs. Most of these mgmt fees are 0.5% to 2% annually.

Fourth, most mutual funds exist not to earn you a lot of money, but are more interested in NOT "losing" you lots of money. That way you stay with them and they continue to collect their fees.

Fifth, mutual funds are not as liquid as one might think. If you're in mutual funds and a Bush talks in the morning and you call your broker to sell because the market is now tanking, the broker will gladly take your order, but the order will not be executed until the day is over and the negative impact is already priced into the fund.

Sixth, many mutual funds charge extra "fees" if you buy/sell their fund within a certain amount of time, meaning you must keep your money in the fund 90 days to 2 yrs before you're free from the fees (read the fine print on trying to get a withdrawal). These fees can be up to 3% or so of your money as well.

Seventh, mutual funds have to be in the market. So if the market is crashing or going down like it has between May and now, then the funds still have to be in the market and taking those losses too. With some practice, you can time your monies to avoid some of those losses (it'll take practice).

Convniced yet? Need more?

Eighth, mutual funds have to be pretty diversified and so if there are hot and cold sectors, they are probably in both the hot sectors and cold sectors. However, as an investor, you can buy into just the sectors you want, like metals, or housing, or energy, etc. or right now, Healthcare, Retail, and insurance!

Ninth, mutual funds are so big, they can only invest in certain companies. A small mutual fund with $10 billion in assets. 1% of that money is $100 million. How many companies are this big where $100 million investment isn't the whole company? Do you want to limit yourself to just those larger companies like microsoft, at&t, home depot, cisco, ebay which have been sideways for years? I think not.

A better way would be to buy ETFs (exchange traded funds) or holders. These trade like stocks, so are very liquid, and do not have the fees like the mutual funds. Further, you can buy/sell them as you wish. They represent sectors or indexes, so buying them gives you the same diversification as the sector/industry/index, but without the extra overhead!

See amex.com (american stock exchange) or ishares.com, holders.com for more info.


You need to invest for yourself. If you can't, then sure, use mutual funds. But be aware of the shortcomings (and as you can see, there are many).


Let me know if you have further questions.

Best of luck!

Answer 2

Investing in mutual funds is very much like investing in stocks. The main difference is that mutual funds do offer diversity. When pick both mutual funds and stocks, one must rely on past results and extrapolate forward into the future. That is unfortunately a risky proposition. In fact 70% of mutual funds underperform the market in general, and a fund that has had a good record in the past may have a very poor record in the future. That being said, for the best chance of having good and consistant results, do not pick just one mutual fund. Select about 5 different funds that have different investment philosophies. For example, a fund that invests in large cap stocks, a fund that invests in small cap stocks, a fund that invests in value stocks, and a fund that invests in foreign stocks. But make sure that each has in the past had consistant results.

Answer 3

Of the factors mentioned by you, consistency is the most important. Also the one around which you can easily differentiate bad from good. My 5 picks would be HDFC Equity Fund, Franklin Prima, SBI Magnum Contra, Sundaram Select Midcap and Reliance Vision.
Well, all these are what is called 'diversified equity funds' - a category widely believed to deliver best returns over longer time-frames. They have the flexibility to invest in shares of companies of vaious industries/sizes. Of course, each will have a definite bias towards 'large' 'mid' or 'small' or certain sectors at a given point of time.
Conservative investors would prefer 'income/debt funds' where returns are more certain but low.
On quality of service, etc, there is not much difference between various fund houses. In my personal experience, though, I find HDFC a little better than others.
If you want to be more 'informed', you can refer to the sites listed below.

Answer 4

If your looking for a mutual fund company that has reliable consistent results on thier mutual funds then I would look into American Funds. When picking mutual funds make sure you invest your money into different types of mutual funds and watch your money grow.

Answer 5

N o such a thing...every fund will tell you that past performance is no guarantee for the future..
At the end all comes to your tolerance of risk

Answer 6

Things change, Today's leaders could be tomorrows losers. Never use pass results to make a investmet decision's.

Answer 7

For 50g i would use vanguard they are pretty solid on thier returns and will heklp you out personally i suggest a index fund

Answer 8

i think best performing funds with consistancy are sbi contra, franklin prima fund ,hdfc top 200 fund,reliance vision fund and sbi global fund

Answer 9

the top mutualfunds company are
1-franklin tempton
2-sbi mutualfund
3-reliance mutualfund
4-kotak mutualfund
5-birla mutualfunds.

these mutualfunds company results good in the market . thank you

Answer 10

The one that made more money every year separately and in total.