I don't know much about mutual funds, but I will just list some pointers that I picked up online.
- Investment Goals and Risk Profile
I believe that this point has been reiterated elsewhere quite frequently, but this probably the first step that you need to take. Knowing what you want will definitely guide you in making your decisions. Some goals that you may want to look at is what kind of returns you want, whether you need money for the future, can you be invested in the long term etc. Risk profile might be whether you can tolerate large price swings etc.
- Expense Ratio
This ratio can be viewed in terms of how much it takes to own the fund. For each fund, you need to account for management fees, analyst fees. This is more of a measure of how expensive the fund is.
- Experience and Expertise of Management Team
This is quite a simple point to look out for, but yeah just make sure that they have some strong record at hand. And don't be afraid to probe more to dig deeper on wehther or not the fund has really performed. Another test is to find out if the fund managers have also invested in the funds as well.
- Appropriate Benchmark for your Funds
You probably would need to compare how your funds have did over time. One way to compare this is through looking at indexes such as the Dow Jones or the S&P 500. You also need to factor in what are the goals and characteristics of the funds, as each funds have got different investment strategies and assets that they invest in, and compare them.
- Diversification
Pick funds that are more diversified across different asset classes, industries and investment products. If needed, you might even be able to diversify across different funds, so that you can hedge the risks of the funds against each other. In this way, you can reduce your risks but not your expected returns.
I don't know much about mutual funds, but I will just list some pointers that I picked up online.
I believe that this point has been reiterated elsewhere quite frequently, but this probably the first step that you need to take. Knowing what you want will definitely guide you in making your decisions. Some goals that you may want to look at is what kind of returns you want, whether you need money for the future, can you be invested in the long term etc. Risk profile might be whether you can tolerate large price swings etc.
This ratio can be viewed in terms of how much it takes to own the fund. For each fund, you need to account for management fees, analyst fees. This is more of a measure of how expensive the fund is.
This is quite a simple point to look out for, but yeah just make sure that they have some strong record at hand. And don't be afraid to probe more to dig deeper on wehther or not the fund has really performed. Another test is to find out if the fund managers have also invested in the funds as well.
You probably would need to compare how your funds have did over time. One way to compare this is through looking at indexes such as the Dow Jones or the S&P 500. You also need to factor in what are the goals and characteristics of the funds, as each funds have got different investment strategies and assets that they invest in, and compare them.
Pick funds that are more diversified across different asset classes, industries and investment products. If needed, you might even be able to diversify across different funds, so that you can hedge the risks of the funds against each other. In this way, you can reduce your risks but not your expected returns.