Facebook TwitterLinkedInYoutubewhatsapp Start Planning for your Financial goals
Schedule Your Free Consultation
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Holistic investment planners, financial planning Chennai, Private wealth management Chennai

Holistic investment planners, financial planning Chennai, Private wealth management Chennai

Financial Planning chennai India, Private wealth management chennai India, Investment Advisory India, Systematic Investment Plan, Mutual Fund SIP, Mutual Fund ELSS, Tax Saving scheme

  • Home
  • About Us
    • Who we are & What we do
    • Services
      • Financial Road Map
      • Retirement Roadmap
      • Asset Allocation Plan
      • Webinar
      • Money Management
      • Wealth Management
    • In the Media
    • Testimonials
    • What Makes Us Different
    • How we can help you
    • Specialties
    • Honors and Awards
    • Vision & Mission
  • Resources
    • Blog
    • Articles
    • Podcast
  • Ideal Client
  • Contact Us
6 factors to choose the right diversified equity fund

6 Factors to Choose the Right Diversified Equity Fund

by Holistic | Filed Under: Mutual Funds

Holistic Investment - equity fund

To invest in a diversified equity fund, you need to pick the right one that suits your requirement best is plain wisdom. It is easier said than done. Where there are hundreds of equity funds each claiming the best returns, it is quite puzzling to zero in on one. And the problem gets further confounded by the self-seeking mutual funds agents .who survive only by cooking the figures.

To cut through all this mayhem, you need to have a set of objective factors serving as parameters while selecting the right diversified equity fund. What matters is the performance of a diversified equity fund against all the parameters.

The fundamental thing is to remember that not a single factor makes a diversified equity fund worthy enough to be a part of a well-performing mutual fund portfolio. An ideal diversified equity fund must pass all the parameters.

1) Match your investment objective with that of the diversified equity fund

First things first. It is of utmost importance that your investment objective is in tune with the diversified equity fund’s investment objective. For example, if you want to avoid risk, it is advisable for you not to invest in a small-cap diversified equity fund that invests in small size companies and can yield volatile returns.

2) Evaluate returns across diversified equity funds within the same class

To compare diversified equity funds within a similar category is one of essentials for benchmarking a fund.

When evaluating a large-cap diversified equity fund for investment, you must compare its yield with other matching large cap diversified equity funds. Comparing it with mid-cap diversified equity funds won’t give you the real picture as the risk-reward relationship between both is too wide to compare.Another factor in evaluating a diversified equity fund is the timeframe. Diversified Equity Funds are designed to deliver returns over a long period of years; you should invest in diversified equity funds with a foresight.

Evaluating a diversified equity fund over a longer timeframe helps you gauge its performance during boom and bust periods. You can observe the consistency of the returns of a diversified equity fund by its performance during different market phases combined with the category average.

3) Check Diversified Equity Fund Returns against the benchmark index

It is mandatory for every diversified equity fund to mention a benchmark index in its offer document. This benchmark index is the signpost to judge if the diversified equity fund has fared well.

While evaluating the performance of a diversified equity fund against its benchmark index, you should take into account the longer time period. Those diversified equity funds that outperform their benchmark indices constantly are best suited for investment.

In India, most diversified equity funds do better than their benchmark indices over a long timeframe. But during choppy times you may find many diversified equity funds lagging behind their benchmark indices. Those diversified equity funds that stay ahead of their benchmark indices during rough times must be earmarked.

Use Mutual Fund Calculator

You can use the calculator, shown below, to find your estimated Mutual Fund Returns.

In this calculator, you can choose a various option as per your requirement.

4) Evaluate the consistency of the diversified equity fund

Apart from peers and benchmark index evaluation, a diversified equity fund must be judged in its historical performance. Many diversified equity funds don’t stay stable over the years, they take a dip during recessions sometimes even below their benchmark indices and category average.

Only a handful diversified equity funds go strong against all odds and display steady performance. Those warriors who brave rough times and display stability are the ones to add to your portfolio and the meek ones you should beware of.

5) Check the costs associated with the diversified equity fund scheme

Besides performance analysis, you must consider the costs involved with making an investment in that particular diversified equity fund scheme as this affects your net returns from that scheme.

Before you make the final decision of investing in a diversified equity fund, you must check its Expense ratio. Along with, you should also know the exit load (charges levied by a mutual fund scheme when redeeming within the stipulated period) while asking for redemption from a diversified equity fund scheme.

6) Risk-Returns analysis of diversified equity funds

To evaluate the performance of a diversified equity fund, it is common to look at its absolute returns. However, that is not enough as diversified equity funds being market-linked are susceptible to Stock related risks. Hence, you should not only assess a diversified equity fund on the basis of returns but take into account the risk involved with the fund.

If you overlook the risk factor, you might lose your hard-earned money. So you must do a risk-returns analysis of a diversified equity fund before you invest in it. There are some simple but effective ratios available to be followed:

Alpha

It is a unit of diversified equity fund’s performance on a risk-adjusted basis. Taking the volatility (price risk) of a diversified equity fund, Alpha weighs its risk-adjusted performance to the benchmark index. The ratio of excess return of the diversified equity fund to the return of the benchmark is the fund’s alpha.

Beta

It is also known as the Beta coefficient and calculates the volatility of a diversified equity fund scheme in relation to its benchmark index. You can consider Beta as the tendency of your diversified equity fund’s ability to react to fluctuations in the market or its benchmark index.

If the above two ratios are taken together, it makes apparent that those diversified equity funds that generate high alpha albeit at lower (less than1) beta are worthy of investment.

Standard deviation (SD)

This is a measurement of the volatility of returns. To get SD, you need to calculate the average returns yielded by the diversified equity fund for a fixed period and then measure the deviation from the mean. Higher the deviation, the greater the standard deviation denoting a highly volatile fund. If you want to avoid high risk, you should choose diversified equity funds with lower SD.

Final Note

Now you know what to look for in a diversified equity fund, you can pick the right one that meets your investment needs. Keep your eyes open and make an informed decision before you invest.

Also, to be a successful long term investor, having a well-drafted financial plan will be of immense help. To create a sound financial plan, I strongly recommend you to take advantage of our

Previous article: Stop Chasing Past Mutual Fund Returns…! Betting on the yesterday’s Mutual Fund Returns could prove disastrous Tomorrow.
Next article: The Amazing discovery in stock market investing that will make you wealthy

Primary Sidebar

Client Login

Recent Posts

  • SBI Life Smart Annuity Plus: Good or Bad? A Comprehensive Analysis and Review
  • Unwrapping Mutual Funds: A Beginner’s Guide
  • LIC Bima Shree Review – Good or Bad Investment Option?
  • LIC New Money Back Policy 25-year Plan – Plan 921 Review: Good or Bad?
  • Tata Technologies IPO Review – Should You Invest?
Lingesh MMG
Lingesh MMG
20. September, 2023.
Na eppo tha financial goal la enna therunju kitta..enaku full support panna thuku thank you..🥰 friendly nalla pesuninga...
Ravi L
Ravi L
15. August, 2023.
Very knowledgeable and professional team, guided me with the precise financial solutions and timely suggestions.
Hardik Dave
Hardik Dave
5. July, 2023.
Holistic Investment is really nice and trust worthy financial planner. They plan things in realistic manner and also consider future dimensions of items also. They are always available for small or big queries, and also share knowledge and help you become more financial literate, and take right decisions in all financial matters.
Dr. Padmakar Wagh
Dr. Padmakar Wagh
27. June, 2023.
Mr Ramalingam who is the Director of Holistic investments has a excellent financial planning knowledge, the entire Holistic team has been very helpful in my financial planning journey and execution. This is my third year of financial planning with Holistic investments and so far I am satisfied with the progress I have made.
Binamra Dash
Binamra Dash
13. June, 2023.
Very knowledgeable team. Guided me properly with my concerns.
Murugan Bala
Murugan Bala
16. May, 2023.
I have been investing through Holistic for the past 4 years and my experience with them have been really good. The team of Rajan and Ramalingam doing excellent services in meeting my needs through proper guidance on investment options customized. Theya re always available on any specific needs time to time.I would recommend their services to my friends and colleagues too.
Neeraja R K
Neeraja R K
15. May, 2023.
Working with holistic investment planners was a really wonderful experience for me. For me the entire team had been very supportive in all ways. Their working strategy is well planned and methodical. They always keep me informed and updated about my investments, so that i can take informed decisions. The team first helps us understand the basics of investments, then they collect data, work with the data and then provide investments solutions according to our goals which i find it the best. Good luck to the entire team.
deepika kulkarni
deepika kulkarni
21. April, 2023.
We have availed holistic service from last couple of years and are very happy with our decision. Their systematic approach has helped us plan our finances and meet our goals. They provide very comprehensive and detail plan and resource management every 6 months which ensures we are on right track to achieve our goals. Rajan and Ramalingam from holistic are always there to help us with our queries. They have also accommodated any changes to our goals or resources mid year in a professional manner.
Ashook Panneerselvam
Ashook Panneerselvam
21. March, 2023.
For the past year, I have been interacting with Holistic Investment. I frequently read Nanayam Vikatan, which is a publication owned by the Vikatan family, and I was impressed by their financial advice. My brother also suggested holistic investing, and he also got excellent financial advice. Holistic Investment follows a methodical approach that I really liked because they first fully understand our financial situation "As Is," which includes "Assets" and "Liabilities," as well as our short-, mid-, and long-term goals, on the basis of which they provide a detailed plan on how to achieve our goals for which they are recommending various investment options. Even in the investment advice, why do they suggest particular mutual funds and what is the justification behind it, which adds transparency to the client. One essential factor is that they are always available. Even if I needed to make some urgent financial decisions, they were very helpful and kind to answer my questions via phone calls, WhatsApp messages, and emails. I was very happy with their service. Periodic reviews are also crucial, even though I have forgotten that they occur once every three months, and I also intend to renew this year.
Mahesh S
Mahesh S
19. February, 2023.
I have availed Holistic investment service for last 1yr against my early retirement decision. they provided me comprehensive detailed report how to move ahead with my existing resources. moreover, they are available to me whenever i have any doubt.. highly recommend others to avail their service
Google rating score: 4.5 of 5,
based on 104 reviews

Google Reviews

Lingesh MMG
Lingesh MMG
20. September, 2023.
Na eppo tha financial goal la enna therunju kitta..enaku full support panna thuku thank you..🥰 friendly nalla pesuninga...
Ravi L
Ravi L
15. August, 2023.
Very knowledgeable and professional team, guided me with the precise financial solutions and timely suggestions.
Hardik Dave
Hardik Dave
5. July, 2023.
Holistic Investment is really nice and trust worthy financial planner. They plan things in realistic manner and also consider future dimensions of items also. They are always available for small or big queries, and also share knowledge and help you become more financial literate, and take right decisions in all financial matters.
Dr. Padmakar Wagh
Dr. Padmakar Wagh
27. June, 2023.
Mr Ramalingam who is the Director of Holistic investments has a excellent financial planning knowledge, the entire Holistic team has been very helpful in my financial planning journey and execution. This is my third year of financial planning with Holistic investments and so far I am satisfied with the progress I have made.
Binamra Dash
Binamra Dash
13. June, 2023.
Very knowledgeable team. Guided me properly with my concerns.
Murugan Bala
Murugan Bala
16. May, 2023.
I have been investing through Holistic for the past 4 years and my experience with them have been really good. The team of Rajan and Ramalingam doing excellent services in meeting my needs through proper guidance on investment options customized. Theya re always available on any specific needs time to time.I would recommend their services to my friends and colleagues too.
Neeraja R K
Neeraja R K
15. May, 2023.
Working with holistic investment planners was a really wonderful experience for me. For me the entire team had been very supportive in all ways. Their working strategy is well planned and methodical. They always keep me informed and updated about my investments, so that i can take informed decisions. The team first helps us understand the basics of investments, then they collect data, work with the data and then provide investments solutions according to our goals which i find it the best. Good luck to the entire team.
deepika kulkarni
deepika kulkarni
21. April, 2023.
We have availed holistic service from last couple of years and are very happy with our decision. Their systematic approach has helped us plan our finances and meet our goals. They provide very comprehensive and detail plan and resource management every 6 months which ensures we are on right track to achieve our goals. Rajan and Ramalingam from holistic are always there to help us with our queries. They have also accommodated any changes to our goals or resources mid year in a professional manner.
Ashook Panneerselvam
Ashook Panneerselvam
21. March, 2023.
For the past year, I have been interacting with Holistic Investment. I frequently read Nanayam Vikatan, which is a publication owned by the Vikatan family, and I was impressed by their financial advice. My brother also suggested holistic investing, and he also got excellent financial advice. Holistic Investment follows a methodical approach that I really liked because they first fully understand our financial situation "As Is," which includes "Assets" and "Liabilities," as well as our short-, mid-, and long-term goals, on the basis of which they provide a detailed plan on how to achieve our goals for which they are recommending various investment options. Even in the investment advice, why do they suggest particular mutual funds and what is the justification behind it, which adds transparency to the client. One essential factor is that they are always available. Even if I needed to make some urgent financial decisions, they were very helpful and kind to answer my questions via phone calls, WhatsApp messages, and emails. I was very happy with their service. Periodic reviews are also crucial, even though I have forgotten that they occur once every three months, and I also intend to renew this year.
Mahesh S
Mahesh S
19. February, 2023.
I have availed Holistic investment service for last 1yr against my early retirement decision. they provided me comprehensive detailed report how to move ahead with my existing resources. moreover, they are available to me whenever i have any doubt.. highly recommend others to avail their service
Google rating score: 4.5 of 5,
based on 104 reviews

Footer

  • Articles
  • Gallery
  • Ideal Client
  • Jobs(Full Time)
  • Podcast
  • Services
  • Testimonials

Connect With Us

Holisticinvestment.in
10/15, Second Cross Street,
Seethammal Extn.,
Teynampet,
Chennai – 600 018,
INDIA.

Copyright © 2022. Holisticinvestment.in | All rights reserved.    Cared with ❤ by T-Square Cloud 1

×