For a new person  and investor its little bit tuff to directly invest in share market, so they choose the easy method that is mutual fund, but they have first question is how to invest in mutual fund ? so in this article we are going to discuss all the aspects of mutual fund, how you can choose the plan, how you can check its performance of it similarly several thing.

Categorize the Mutual Fund

We can categorize the mutual fund on different parameters like on the basis of capitalization, sector wise, open ended and close ended fund, hybrid fund, debt fund  etc  there is a large discussion on it.

But we will tell you a simple way  that would be easy for a new investor and he/she can easily invest by himself.  You can find several good site that will show you the performance report of a fund,  but we prefer two sites which we use mostly first is moneycontrol.com and second is valueresearch.com

First when you will go on the site then when you will choose the mutual fund section then there you can find a list of different funds , there you can check the details in image below–

Here you will find several information, the first column will show you the name of fund, second is the ranking which is generally provided by CRISIL. The raning is based on the basis of performance in a long term, and good ranking shows the good performance of a fund, third column will tell you the asset of it that is in crore we can say the value in crore.

Next column is NAV that is net asset value of the fund and this is price on which you buy the fund.  After it you will find several column that will show you the return of it monthly , quarterly, half yearly , yearly 2 years , 3 years , 5 years etc.

when you want to check the details of a fund then click on it and it will show you the details of it, its centimeter,  its performance chart,  its portfolio , its weightage in different sector where they have invested etc.

Now we come to an important points how to buy it, the answer is before 2013 there was only one option you could buy a fund only by any broker , but later Sebi had changed it.

How to buy Mutual Fund

Now you have two option you can buy a mutual fund by two ways either by a brokerage firm or direct from  Mutual fund AMC (Asset management company who manages the fund).

Both have differences when you buy a mutual fund from any brokerage firm then it’s generally called a regular plan, and they charge about 1-1.5% extra  as the expense ratio.

When you direct buy a fund from that mutual fund AMC then it’s called the direct plan and you don’t need to pay extra 1-1.5% which shows a big differences in your return specially when you buy it for a long term.

When you will check any fund they there you can find two similar name of it with a letter of “R” and “D” , that means these shows about regular fund and Direct fund.  you can also find the differences in NAV and also in asset value, generally the asset value of of a regular fund is much higher than direct fund, because mostly people are not aware of it.

Here in above image we can check the expense ratio of a regular fund is a 2.54% and for a direct plan it is 0.96% , so it will show a large differences when you invest for a long term. you an also calculate the return of a regular plan and direct plan.

Now we come to the next important points , suppose if you want to invest in a mutual fund by a broker then you need to open a demat account  like zerodha or any other broker etc, or you can directly go that mutual fund company like sbi mutual fund, axis mutual fund, kotak mututal fund , hdfc mutual fund etc.

There is a large number of fund management companies are available, so you can choose them by your own decision. We will cover some other points in a different topic, if you have any question or confusion then you can comment us , we will try to solve your queries.

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