How To Select The Best MF To Invest In SIP ?

With minimum capital investment and low market risk, SIP is the most preferred investment plan these days to create wealth future financial security. It can be weekly, monthly or quarterly in nature. In other words, investments can be made at different intervals according to the requirement of the investor. 

Best MF to invest in SIP | Image Resource : Shutterstock.com

However, one has to be careful when they decide to invest in a mutual fund via SIP. Selecting the right mutual fund is most essential and often can lead to risks if not chosen properly. Here is a quick guide to selecting the best mf to invest in SIP.

Here are a few steps you should follow when selecting the best mutual fund to invest in SIP.

• Before selecting the right mutual fund one should be sure of their investment objective. While one often invests with the aim of gaining better returns, time period is also an important factor to consider. It is said that the investor’s risk appetite defines his portfolio and thus accessing the investment objective is highly essential. 
• Study the risk return parameters well. While the prime goal of an investment is to produce higher returns on investment one should make a comparable study about risk as well as return factor as they both go hand in hand with capital investment.
• Compare various funds and check their performance for similar parameters.
• Pay attention to the time period of the investment and also study the short-terms as well as long term performances.
• Fund management is also another factor one needs to keep into consideration. Since the performance of the mutual fund is totally based on the fund manager and his team, hence it is imperative for an investor to hire only such individuals. Thus selecting the right mutual fund house with excellent fund managers is important.
• One should also check the cost of the mutual fund. It often turns out that two mutual funds have same scheme and thus is it not wise to buy a mutual fund with higher cost. 
• One should also pay attention to loads and recurring expenses when selecting the best mf to invest in sip.

Thus it is very important to study the above parameters before making the right choice. This is because only then you will be able to reach your long term financial goals.