Is it wise to invest in mutual fund schemes whose NAVs are above Rs. 100/-? I refer to schemes with good retur

Question

There are mutual fund schemes which have run over two decades and have NAVs above Rs.150/-
Is it okay to invest in such schemes with long term view?
One fellow explained me the concept where when one invests money in bank's fixed deposit, where no units are offered but only assured returns and still people invest their money there.

Ditto attitude should be adopted when investing in aged MF schemes, where one should not focus on units purchased but attention be paid to expected growth of money invested after a reasonable research.

But my concern is schemes implicit age of death.

Answer 1

To answer you in one single word, YES. It is immaterial what the NAV of the fund is at any point of time. Whst is of importance is the performace of the fund over the period of time you are holding its units in percentage terms. No one will be able to tell you exactly how the fund will perform. But you can get information about its past performance through websites like www.valueresearchonline.com. Having said that funds which have very large AUMs are unweildly for the Fund Manager. You might want to be invested in nimble funds.

Answer 2

See, FOR EXAMPLE a Rs. 100/- per unit NAV will rise or fall suppose Rs. 1/- everyday whereas a Rs. 10/- NAV will vary 10 paise. If you are investing suppose Rs. 10,000/- you can get 100 units of that Rs. 100/- NAV or 1000 units of Rs. 10/- NAV. In both cases the percentage of return remains same, thus there is no point in beleiving that a MF NAV which has given good returns in the past and has thus gone costlier will correct sharply. It always depends on at market level are u entering the NAV.
Moreover it is true that if a MFunit is giving good retuns since years then the MF becomes more trust worthy, and u can expect good returns also in the future. It proves that the MF company's stategy is working good. THERE IS NO AGE OF DEATH FOR FUNDS.If the fund has more captal, it will do well.
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Answer 3

The track record of the scheme and the fund manager is more important than the NAV for investing in a scheme. Actually NAV is not important because if the stock market goes up, every schemes NAV will go up if the fund manager is good.If you invest 100,000 in scheme having NAV of 100, you will get 1000 units. If you invest the same amount in a new scheme with NAV of 10, you will get 10,000 units. If both schemes are performing well you will get the same kind of returns, but if second scheme outperforms the market you will get higher returns. The choice depends on your risk appetite.

Answer 4

It is ok in investing in older schemes ( More than 3 years old) which have seen ups and downs of the market. A stable performance over a period of time is a good indicator of the quality of fund management. It is always safe to invest in M.Fs through SIP route. That is to invest Systmatically every month. It will save you from the risk of timing the market. It will benefit you by cost averaging over a period. For more information on the performance of the schemes you may visit www.valueresearchonline.com. Franklin India's Prima Plus scheme suits your requirement whose NAV is about Rs.135/-.

Answer 5

NAV has got no bearing on the performance of the fund. on the contrary higher NAV suggests that fund has been able to perform well for the given period. IT IS PERCENTILE GROWTH WHICH IS COUNTED . you have 100 units or 1000 units does not matter much.

Answer 6

There are a million good MFs out there - why invest in one that might be a risk for fraud?

Answer 7

i can say this is nice