If you want to invest in mutual funds, it makes sense that you’d want to invest in the ones that bring in the best performance. But how do you find them?
Fortunately you don’t have to resort to closing your eyes and sticking a pin in a list you have in front of you. There are ways you can make the job easier. Here are some suggestions.
Check out the fund manager
This is the most important aspect of all. If you only pick one thing to do, make it this. It is better to choose a good fund manager with a company you’ve never heard of than to choose a fund manager with no track record who works with a company that is a household name. In short, go with the fund manager and not the company.
Find the benchmark for the funds you are interested in
You need a benchmark in order to gauge how well – or badly – a particular fund is doing. The benchmark can vary depending on the specific funds you are looking at. For instance, if you want to invest in a stock mutual fund you would look closely at the S&P 500 Index.
Look for consistent returns
This is a good way to find funds that perform well over a longer period of time. This points to funds that can be relied upon to do well even when times are not as good as they might be. Of course you will have periods when any fund will do better or worse than it may do at other times. But you want to pick something that is more consistent than its counterparts. You want to avoid the funds that have a tendency to dip further than others do, in order to make the most of your investments.
Look for no load funds
This is another important aspect to consider. A ‘load’ is basically another word for a charge made for entering into a mutual fund. Hence where there is no load, there is no fee. This is good news for you because it means you will pay less over the long term. This automatically means you get a better performing mutual fund, simply because you will pay less than you would otherwise. Just imagine the difference when compared to a fund that requires you to pay fees and charges every year.
As you can see there are a number of ways to help you find top performing mutual funds. While the fund manager is the most important element of all, adding in the other elements certainly helps to narrow down the possibilities. This will leave you with only the best mutual funds to consider.
One final point – don’t assume you will find the top performing funds in a matter of minutes. This process can take some time to go through if you want to do it properly. Spending a little more time now will mean better profits later on.