Which Mutual fund to invest right now in 2024
19 December, 2024
Synopsis
- When it comes to choosing the best mutual funds, it's essential to consider several factors. These include the type of fund, the current market outlook, past performance, expense ratio, fund manager experience, and performance ratios.
- At the time of investing, investors are advised to choose funds that align with their financial objectives and risk tolerance rather than simply following market trends.
Investing may often feel like navigating an unplanned city without a map. There are so many options available that it is easy to get confused. Think of mutual funds as different neighbourhoods in your city. Some are bustling and exciting but a bit risky (like equity funds), while others are quieter and sombre (like debt funds). Just as choosing a neighbourhood that fits your lifestyle, you'll want to pick mutual funds that match your financial objectives and risk tolerance.
As we move through 2024, the mutual funds landscape keeps changing. New opportunities pop up while others fade away. It's like an exciting city that's always under construction, but it requires you to stay alert and informed for a smooth ride across the city.
Let us examine different types of mutual funds, what to consider when choosing the best mutual funds to invest in 2024.
How to select the best mutual funds?
Selecting the right mutual funds might seem like a task. But in reality, it is not if you keep a check on a few points. So, here are the criteria you can consider before taking the jump.
Types of Mutual Funds
One of the most important things is to understand the difference between the different types of funds and pick the one that matches your investment objective and risk appetite. Equity funds are very risky, while debt funds are comparatively less risky. However, equity funds can generate higher returns than debt funds because of their stock exposure where you can select your fund- based performance. So, you can select the fund based on your risk and return expectations.
Current Market Outlook
You can check the current market outlook and see which category is getting inflows or experiencing outflows. If sectoral/thematic funds, mid-cap funds, or aggressive hybrid funds are rising and their assets are sharply increasing, you can also explore these funds.
Past Returns
Though past returns are not a direct indication of future returns of any fund, they can give you a fair idea of how it has performed over the years. So, you can analyse the fund's last 10, 5 or 3 years of performance before investing in it.
Expense Ratio
The expense ratio is the cost for managing the funds, deducted from the daily NAV. Thus, the higher the expense ratio, the lower your returns during redemption. In that case, you can choose a fund that has a lower expense ratio than its peers in the same category.
Fund Manager Experience
The fund manager makes all the crucial decisions about where and how the pooled money is invested. So, before investing in any fund, check out the fund manager’s experience and see how many funds he is managing right now.
Performance Ratios
A fund has several performance ratios, such as Alpha, Beta, Standard Deviation, and Treynor Ratio. Each ratio gives you a quantitative measure of the risk and return profile of a fund. So, you can compare the fund’s ratio with its category average to analyse the fund's performance.
Making Informed Investment Decisions with HDFC Bank SmartWealth
When choosing mutual funds in 2024, it’s important to make informed decisions instead of following specific recommendations. With the HDFC Bank SmartWealth app, you can easily find the right funds based on your personal financial objectives.
The HDFC Bank SmartWealth app gives you fund suggestions based on extensive MF research. It can help suggest curated portfolios based on your investment profile and financial plans. Here’s how it helps:
25+ Years Experience: The app recommends funds tailored to your financial profile using extensive research. You can easily explore options aligned with your risk appetite and investment needs, eliminating the need to search for individual funds.
Easy Fund Performance Check: You can easily view how different funds have performed in the past. The app shows important details like returns, fees, expense ratio and exit load, making it easier for you to decide which fund fits your needs.
The HDFC Bank SmartWealth App also provides up-to-date research and market information. This helps you stay informed about the performance of different funds and trends in the market, so you can make confident decisions.
Mutual fund investments are gaining popularity, but the wise idea is not always to go with the flow. Not every trending fund can suit you, so pick the ones that comfortably help you realise your dreams.
If you want to get rid of the stress of choosing the top mutual funds, then you can download the HDFC Bank SmartWealth App and invest in the funds picked by professionals.
Disclaimer: This communication has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. HDFC Bank Limited ("HDFC Bank") does not warrant its completeness and accuracy. This information is not intended as an offer or solicitation for the purchase or sale of any financial instrument / units of Mutual Fund. Recipients of this information should rely on their own investigations and take their own professional advice. Neither HDFC Bank nor any of its employees shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in this material. HDFC Bank and its affiliates, officers, directors, key managerial persons and employees, including persons involved in the preparation or issuance of this material may, from time to time, have investments / positions in Mutual Funds / schemes referred in the document. HDFC Bank may at any time solicit or provide commercial banking, credit or other services to the Mutual Funds / AMCs referred to herein.
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