Navigating the complex world of investments can be challenging, yet this guide aims to streamline the process of Mutual Fund Selection for Non-Resident Indians (NRIs). Let’s dissect it into easily comprehensible steps.
In this article, we will discuss about...
Introduction
Investing doesn’t have to be complicated. This guide is designed by CA Arun Tiwari to make the process simple for NRIs. By focusing on three main factors, we’ll uncover the secrets to smart investment decisions. CA Arun Tiwari, renowned for his insights on NRI taxation and legal matters, offers a pragmatic guide to empower your investment decisions.
Don’t let reading hold you back, Watch our video instead
Return: Long-Term Success
Start with the return – a crucial factor in mutual fund selection. Look at the long-term picture, spanning 3, 5, or 10 years. Choose funds with a track record of stable and consistent performance and always go with reputed and big fund houses. Investors are likely to see more benefits from the compounding effect when the investment period is longer. Success in your investment journey begins with funds that reliably deliver returns.
Risk Assessment:
Moving on to the second key factor – risk assessment. As they always say Mutual fund is subject to market risk. Understanding the level of risk a mutual fund takes is essential. Dive into the fund’s portfolio, exploring different segments and sectors. Be cautious with excessive exposure to small caps; prioritize funds with a balanced mix of large and mid-caps. Flexi cap funds and Multi cap funds also a good option. Navigating the investment landscape requires a keen eye on managing risks.
Consult CA Arun Tiwari for more information at 📞 8080088288 or cs@aktassociates.com
Expense Ratio:
Consider the expense ratio – a crucial checkpoint in selecting mutual funds. Understand the fund’s charges and aim for a balanced ratio. Find a middle ground – not too cheap, not too costly. A reasonable expense ratio ensures your returns remain intact. Explore the top 10 stocks in the portfolio for insights into the mix of large, mid, and small caps, helping achieve a balance between cost and quality.
Empowering Choices: The Three Filters
Combine these three filters – Return, Risk, and Expense Ratio – to shortlist mutual funds tailored to your preferences. This strategic approach ensures your investment portfolio aligns with your financial goals and risk tolerance.
When to Review Your Mutual Funds:
In the long-term game of investments, patience is key. It’s usually advised not to regularly check your mutual fund. With mutual funds, your investments are on autopilot. The fund manager takes care of everything, allowing you to relax and not stress about your fund’s performance. Initiate reviews only if your chosen mutual funds consistently outperform their peers or the average returns in their segment. Avoid unnecessary reviews for minor performance differences. Stick with your chosen funds unless there’s a significant gap in returns, preserving your capital and minimizing unnecessary shifts. If you still wish to review your mutual funds, you can do so after three years.
Conclusion:
In conclusion, this guide offers a straightforward method that takes less than five minutes to shortlist mutual funds. The ultimate goal is to identify funds that offer extraordinary returns at a reasonable cost. Embrace this uncomplicated strategy to confidently embark on your investment journey.