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'How to compare MFs?'

October 25, 2023 09:59 IST

Do you have mutual fund queries?
Please ask your questions here and Ulhas Joshi, CEO, RankMF, will answer them.


Illustration: Uttam Ghosh/

MAHESH: Please suggest the top 5 mutual funds for monthly Rs 2,500 each...

Hello Mahesh, thanks for writing to me.

Assuming your goal is wealth creation over the long term and you can take risks, you can consider starting SIPs of equal amounts in:

1. Edelweiss NIFTY 100 Quality 30 Index Fund

2. DSP Quant Fund

3. SBI Focused Equity Fund

4. HSBC Consumption Fund

5. UTI Dividend Yield Fund

Periodic rebalancing of your portfolio is essential to ensure you are on the right path. Stepping up your SIPs every year will help you create a larger corpus.


Nitiksha: How should one compare the performance of any two schemes?

Hello Nitiksha, thanks for writing to me.

You can consider evaluating the performance of two schemes based on:

1. Strength of the portfolio of the respective schemes

2. Rolling returns and SIP XIRR returns

3. Sharpe ratio of the respective schemes

4. Expense ratio of the schemes

5. Portfolio turnover ratio of the schemes


Chandru: How to invest in index funds? Examples of few index funds in India?

Hello Chandru, thanks for writing to me.

Index funds are funds that track or invest only in the stocks of a particular index like Nifty 50, Sensex 30 or so on.

Some notable options are UTI Nifty 50 Index Fund & Nippon India Nifty SmallCap 250 Index fund.

You can invest in them through the respective mutual funds' website or through an AMFI-registered mutual fund distributor.


Anonymous: Dear Mr Ulhas, what are the tax benefits of investing in a mutual fund? How can I save tax by investing in SIPs or mutual funds? How much can I invest per year to avail benefits?

Hello, thanks for writing to me.

I believe you are writing about investing in Equity Linked Savings Schemes investments to save on income tax.

Per current rules, if you invest Rs 1.5 Lakh in ELSS schemes of various mutual fund houses, you can save around Rs 46,800 every year in income tax under Section 80C of the Income Tax Act.

Investing in these funds carry a mandatory three-year lock-in and you will not be able to redeem the investment till three years have passed.

I recommend you consult a tax advisor who can help you plan your taxes and explain how gains in investments in equity, debt or other mutual fund types are taxed.


Soham: What is the future of Tata Digital Fund? Is it worth for a lump sum investment now?

Hello Soham, thanks for writing to me.

Tata Digital Fund is a thematic fund, that is invests only in companies that are in a particular sector or companies that produce or provide services related to a theme.

In case the sector does well, the fund will probably do well and vice versa.

If you are investing in any fund for long term wealth creation, I recommend you reach out to financial planner who can understand your risk objectives and investment horizon and make a suitable plan for you.

Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this QnA or an attempt to influence the opinion or behaviour of the investors/recipients.

Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.