The perfect portfolio

We present a portfolio of features on funds to help you get started and get ahead.

     Print Edition: August 23, 2007

Investing in a good mutual fund is the best and the easiest way to build a perfect portfolio. Money Today partners with Value Research to present a portfolio of features on fund to help you get started and get ahead. 

 Intelligent investing is intelligent no more. Or so it has seemed for the past few years. Because with mutual funds, zeroes all but find their own way into bank balances. Pack a few thousands in a “good” scheme and that’s it. Fund managers will trawl the investment space to churn your money best. The risk-reward balance ensures you sleep well most nights.

There’s more than investment woes to share in evening dos. More time spent with kids’ homework than poring over stock pages of pink dailies or news about interest rates. And with systematic investment plans (SIPs) you aren’t exactly scrimping your way to this zero-worry state.

Clearly, the no-personal-interference principle is working wonders for your money. Average funds gave double digit returns last year. So why read the next 60 pages on mutual funds? Why try and understand them better? Isn’t investing in funds intelligent enough?

No. Because it isn’t quite that simple. Most people could fine-tune their strategies on how and why to buy into mutual funds. A fine-tuning that could determine whether you earn 3.98% or 94.36 % on your mutual fund investments this year. That was the gap between and best and the worst performing equity-diversified fund scheme we analysed for the past one year. Fund investing isn’t also as simple as picking the best schemes based on past year’s records. Yesterday’s No. 1 can be tomorrow’s No. 10, or lower. There are over 700 funds to choose from for retail investors alone.

A thorough assessment must include comparison of risks, returns, fund portfolio, expense ratios…and what have you. Not to forget their suitability to your risk profile, goals and period of investment. If volatility unnerves you, what funds will give steady returns? Is there something for retired investors? Is a particular sector exposure too high?

Best equity diversified

This is not to say that mutual funds are not intelligent or not simple investments. Of course they are. That is what makes them so special. Compare buying funds to buying property or stocks. If you were to choose 10 scrips from 100 listed companies, there are 17X10^12 (approximately 17 followed by 12 zeros) possibilities. And there are over 5,000 stocks listed in the Indian stock markets. Imagine monitoring and sieving through reams of facts and rumours that each company generates on a daily basis!

Confused and intimidated already? Here’s where we come in. To inform and explain the exact dose of expertise required for becoming an intelligent fund investor. At the outset, let’s assure you it is not difficult. Don’t be intimidated by the size of this MONEY TODAY issue (thickest since our launch in October last year). The attempt is to cover the maximum base possible. In this section we analyse schemes that we consider to be the best performers across six select classes of mutual funds.

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