Mutual Fund Investments Should Match Your Risk Profile And Goals

Investors in India are increasingly choosing mutual funds. Given the variety of options, it might be difficult for investors to select the best mutual fund scheme suitable to them. While return is a crucial factor, investors should pay more attention to the risk taken by the fund manager than merely its absolute returns and they should focus more on the amount of risk they are willing to accept for possible returns. A mutual fund scheme’s investment objective and its approach to the portfolio should be an important criterion. Some investment plans may invest in stocks, while others may invest in bonds or both (hybrid). Debt-oriented funds provide lower returns but are less volatile than equity-oriented funds, which typically offer higher returns, but it also carries higher risk and volatility too. Based on their investment objectives, investors should select a mutual fund scheme...