5 Valuable Factors Critical to Mutual Fund Investments in India

When it comes to mutual fund investments in India – or for that matter anywhere in the world, you do need to be wary of various important aspects. Unfortunately, many investors choose to ignore such factors.

That is the reason why we have written this article. Here we have highlighted factors that you must keep in mind before embarking on the critical journey of investing in mutual funds in India.

Always Read the Fine Print

As with a lot of things in life, many important aspects related to mutual funds lie in the details. Or perhaps more specifically in this context, in the fine print. After all, as Indians, we are all too familiar with the mutual fund advertisements where it is clearly said, “Read all scheme documents carefully before investing”.

Unfortunately, pretty much all of us are guilty of simply choosing to ignore these fine print details and straightaway jump to making an investment.

That is clearly a wrong approach; you genuinely should read through those details before making mutual fund investments in India.

The Ability to Stay Invested

As with a lot of other investments, with mutual funds too, you need to stay invested in order to reap long-term rewards.

Now, while a lot of Indians making investments in mutual funds are actually aware of this, they do not have the means or the tenacity to stay invested for long. What we mean is that either they may have financial compulsions for which they need to withdraw their investments prematurely or perhaps they may simply be too tempted to spend on other materialistic possessions than to let their investments remain.

As a long-term investor hoping to secure maximum returns on your mutual fund investments in India, it is essential that you do everything possible to stay invested in the long run.

Always Opt for Direct Plan Mutual Fund Investments in India

When it comes to mutual fund investments in India, you have the option of either opting for direct mutual fund plans or regular mutual fund plans. In the former, you purchase directly from the mutual fund company whereas, in case of the latter, you buy through a middleman such as a broker.

No doubt, when you purchase through any extraneous entity in between, there will be an add-on charge to your purchase. Over time, this will only affect your overall returns from the investment you made.

That is the reason, it is strongly advised that you opt for direct plan mutual fund investments in India, as opposed to regular ones.

Mutual Fund Investments in India
Small but Intuitive Steps can go a long way in ensuring Excellent Returns on your Mutual Fund Investments in India

Broad-based Criteria for Mutual Fund Investment Selection

You will perhaps be amazed at some of the selection criteria which many people deploy when opting for a particular mutual fund to invest in. For instance, if a particular celebrity endorses a particular mutual fund – whom they like, then they choose to invest in that fund. Otherwise, if they see just one attractive aspect – say the ratings given by a particular rating agency, or perhaps its short-term returns, they simply opt for that fund on that basis.

These are all avoidable criteria when choosing a particular mutual fund investment in India. Instead, your criteria should always be broad-based and multiple, viz. a number of different factors should ultimately go onto formulating your decision to opt for a particular mutual fund to invest in over another.

Averaging the Market with SIP Investments

While SIP or Systematic Investment Plan is something you might have heard about previously, you may not be aware of the background behind it. While the ability to make relatively smaller investments through SIPs is always there, it is also about averaging out your overall purchase costs.

After all, ups and downs are an unavoidable reality of the markets. When you invest through SIPs, you average out these ups and downs to ultimately keep the costs of your mutual fund purchases at an optimal level.


It really doesn’t take a lot to make smart and effective choices when it comes to mutual fund investments in India. So make sure that you keep the abovementioned valuable factors in mind before you make any mutual fund investment.

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