How to measure Equity Mutual Funds Performance

management business

Are you planning to invest in equity mutual funds? Confused as to how actually equity mutual funds perform? With the guidance from this article, you can become an expert investor by yourself.

Guidelines to measure the performance of Equity Mutual Funds:

1. First and foremost, check the profile of the company that has the Asset Management Business. Most of the companies in India including HDFC, ICICI Prudential, Aditya Birla, Reliance, SBI, etc. have good management expertise along with a team of expert fund managers. When you search for the top equity mutual funds in India, you will most definitely see the funds from these Asset Management Companies (AMCs).

Mutual Funds

2. Once you are satisfied with the profile of the AMC, the next step is to check the profile of the fund manager who takes care of the investments. Some companies have a group of fund managers who take joint investment decisions. However, some companies have dedicated fund managers who take such decisions. Hence, it becomes important to analyze the fund manager’s part profile, his decision-making capabilities, and his performance in the economic downfall. You can get most of these details about the fund manager from their existing clients.

3. Thirdly and most importantly, you must check the history of the performance of the particular scheme you are interested in. If it’s a New Fund Offer then you need to focus on the above two points only as they will be the safest bet, but if you are interested in existing schemes then you should collect information on their performance in the past 6 months, 1 year, 3 years and 5 years possibly.

4. After checking their performance, it’s time to compare the results with other similar schemes whether they have generated higher and more consistent returns than the other schemes. Once you pinpoint the scheme that has generated greater returns with higher consistency, you can choose to invest in that particular scheme.

About the Author

Lakshay Nath is currently pursuing his MBA in Banking & Finance and has a keen interest in encouraging the saving & investing culture in the Indian economy. He keeps on analyzing the market to find out the best equity mutual funds in India.

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