Investments are crucial for everyone and you may always look out for different avenues for savings. Likewise, the Indian financial market offers numerous avenues to choose from. However, the return rate offered by each matters the most.
In an attempt to mitigate the investment risk and maximize returns, investors prefer to choose mutual funds. These schemes are professionally managed by a group of fund managers who are market experts in tapping lucrative opportunities. The safest of all these schemes are fund of fund schemes.
Fund of Fund schemes offers optimum returns while minimizing the investment risk. Here are the tips to choose some of the best Fund of Fund schemes:
- Know the Investment Objective
Before you plan to invest in any of the schemes, it is recommended to know the investment objective. Without a proper objective, you will not be able to pick the right scheme. Once you have identified the objective, you can move ahead with choosing the right amount.
- Compare the fund houses
Fund houses play a key role in determining the performance of the scheme. Before you move ahead to pick up the scheme on the basis of the current performance, it is recommended to check the credibility of the fund house.
Note: Established fund houses offer consistent returns
- Assess the fund performance
This is the crucial factor considered for choosing the right mutual fund scheme. Without assessing the performance of the schemes, you will never be able to choose the right investment avenue. Wisely compare the schemes for NAV performance over 1 year, 6 months, 3 months, or 5 years in case you are looking for long term investment. For instance, schemes such DSP BlackRock Global Allocation Fund has performed well since the last few years.
- Identify the Loads
Loads are the service charges you pay to the fund house while buying or redeeming units of mutual funds. Generally, they are around 0.5% to 1%. However, certain schemes charge more. Keep an eye on these charges.
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