Pin It

Best Mutual Funds to Buy: An Overview

Best Mutual Funds to buy are those which are usually flexible, short and give a guaranteed percentage of return on the money invested. They are the type of Investment where funds are collected from many investors and collectively used to invest in company securities like stocks, bonds and fixed interest dividends by a middle man, often an investment bank or broker. They aim at an attempt to raise capital gains out of these sources and providing a gain to the investors. Investors can be individuals, partnership firms or companies. The following things should be considered for deciding what is the Best Mutual Fund to buy.

Quartile performance of mutual fund schemes should be considered to determine if it is a good mutual fund. The four quintile being the Top, upper, lower and bottom, we should ascertain the growth of a fund from Top to Bottom.

Alpha, is one of the major investment indicator of a mutual fund. It may range from positive to negative according to the growth of the investment. The more positive the Alpha the better.

Beta measures the Fund’s volatility against the benchmark of the industry. The higher the value of the Beta the greater is the risk.
Standard Variation of a mutual fund means dispersions of returns from its means. More the Standard Variation more is the growth in the Mutual Fund Scheme.

Sharpe Ratio measures risk adjustment performance of a scheme. The higher the ratio, the bigger is the risk adjustment performance. This is a useful tool to ascertain whether the scheme can give high returns with less risk compared to similar schemes in the market.

R Squared of a Mutual Fund refers to the statistical measure of its portfolio against a benchmark ranging from 0 to 100. A fund with R squared index greater than 85 is considered a Best Mutual Fund to buy.

Expense Ratio of a mutual fund helps ascertain whether it is a Best Mutual Fund to buy or not.

About The Author