Mutual funds can be tricky to understand. Here is a simple guide to understanding it that answers all your queries, from the basics to choosing which fund is better for you
OLM 50 India's Best Mutual Funds: This issue of Outlook Money's Best Mutual Fund is a practical guide to smarter investing in all types of mutual funds - Active, Passive, Direct, Equity, Hybrid, and Debt Mutual Funds. Where active and passive mutual funds are managed by fund managers who take commission, direct funds are invested straight through the company, eliminating the middleman and the commission paid to the fund manager.
Other mutual funds, like equity funds, have higher risks but equally higher rewards, while debt funds generate steady returns and carry lower risks. However, hybrid funds are the best of both worlds, providing balanced risks and rewards.
The video then proceeds to interview Kundan Kishore, the author of the cover story on India's Best Mutual Funds, where he answers various queries and real-life concerns of people who want to invest in mutual funds, and what is the right fit for them.
"Our idea is not to tell the readers that investors should switch to passive funds from active funds; in fact, passive and active funds go hand in hand because India is an emerging market. If a fund is underperforming its benchmark, i.e., 2-3 years, it doesn't mean that a fund cannot outperform in the long term," says Kishore.
Here, Kishore advises the investors to look at funds that have consistently delivered better returns than the benchmark. That would be the right strategy to make the most out of the market.
Watch the video here to learn more about the best mutual fund for you.