Many Indians today invest in mutual funds hoping to grow their money faster than traditional savings. But experts say that most investors look only at returns and ignore the health of the fund itself.
They focus on the number showing how much profit they’ve made, without understanding the factors behind those returns.
Financial experts believe that this habit can lead to poor investment choices and unnecessary risks. To make the most of mutual funds, investors must look beyond returns and study how a fund performs, how long it has been consistent, and how efficiently it manages risk.
ABSOLUTE RETURNS DO NOT TELL THE FULL STORY
Abhishek Kumar, Sebi-registered investment adviser and founder of Sahaj Money, said that most investors rely only on absolute returns while judging a mutual fund’s performance.
“Calculating absolute returns is a simple way of showing the gain or loss made from an investment.
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