What are some things to look for in a Mutal Fund?

Question

Im a beginner in investing to Mutual Funds and would like to know what things I should look for in a fund that is going to perform above average and have low risk while giving a good rate of return in the short and long term?

Answer 1

The first thing to do is to read the prospectus. This will detail all the risks, fees, objectives, fund name, manager, how much experience the manager has, dividend payment dates, and dividend yield. If a fund has an expense ratio above 1%, you're paying too much. Always go with low cost mutual and index funds. Also look for the past 1,3,5, and 10 year performance of the fund. Mutual funds are way more convenient than individual stock. Reason: instant diversification, professional management, low fees.

Answer 2

I think you might be looking for more than most mutual funds are capable of. A couple that meet some of your criteria are PENNX. Risk is lower than most. Long term rate of return is pretty good. It might fall down though on above average performance. Can't have everything.

PRWCX is another. Also has lower than normal risk and long term rate of return is also pretty good. Again the above average performance is somewhat lacking.

CHN has the the above average performance but is failing in the low risk category.

Answer 3

If you have a tooth problem see a dentist. If you have a question concerning Mutual Funds see a reputable broker who trades in mutual funds. Every investor wants his investment to perform above average,at low risk with a good rate of return in both the short and long term. If you have limited funds to start you are looking for safe venues. If the funds are discretionary, you have the option to find investments with more return but also more risk.

Answer 4

Risk is the hard part to figure into your search... I usually try to gauge the risk by the area or sector the fund is investing in ( steer clear of financials !!) ...and I'll go by performance...above average most years ? ..and most important: how did the fund do in " bad" times ? Look for small losses in 2000- 2002..for example..( shows that they manage to hang on to most of the nice profits from the good years)