Here are the basic steps to pick a good equity mutual fund scheme
Santosh Joseph, Founder and Managing Partner Germinate Wealth Solutions LLP says that there are three simple filters that can help you make a good decision.
Company background: The investor should check the credentials of the promoters of the mutual fund company. Established and professional companies have sound policies and investment experience to ensure your money is safe and also well positioned to benefit from market movements.
Portfolio/Fund Manager: The fund manager's track record and his ability to navigate market cycles successfully over long time periods is a great factor that one should study.
The objective of the fund: Check on the ability of the fund sticking to the investment objective mandate. Avoid a fund which has frequent shifts to the overall theme or allocations.
There are many who fall for the obvious past performance formula. There’s always a more intelligent option, it’s best to contact your advisor or mutual fund distributor to make an informed decision.