To Grow Your Wealth... A
Top Fund or the Right Fund? – S. Sridharan, Wallet Wealth LLP
When investing in Mutual Funds, should you choose a
fund by its name and past performance... or based on your financial needs?
“This
fund has delivered more than 20% annual returns over the past three years.
Should I invest in it too?” Arun asked his friend.
“It may
be a good fund. But the important question is, is it the right fund for you?”
his friend asked in return.
Arun was
puzzled. “If it is a good fund, shouldn’t it be good for us too?” he asked.
“Not
necessarily. A fund that suits one investor may not necessarily suit another.
Instead of looking only at the fund’s past returns, you should consider your financial
goal, investment time horizon, when you will need the money, and how much
market volatility you can tolerate,” his friend explained.
This is
one of the most important aspects that many investors overlook when investing
in Mutual Funds.
What Does ‘Top Fund’ Mean?
Many
investors assume that a scheme that has delivered the highest returns over a
particular period is a “top fund”. However, delivering high returns in a
particular year or over a few years does not guarantee that the same fund will
continue to deliver similar returns in the future.
A fund’s
past performance is certainly an important piece of information. However, it
should not be the only basis for making an investment decision.
What Is the Right Fund?
There is
no single “right fund” that is suitable for everyone. A right fund is one that
is appropriate for an investor’s financial needs, goals, investment horizon
and risk-taking ability.
For
example, a person who needs money for a child’s higher education after 15 years
and another person who plans to buy a house in two years cannot necessarily
follow the same investment approach.
|
What to Consider |
Why Is It Important? |
|
Financial
Goal |
Helps
determine what the investment is meant to achieve. |
|
Investment
Time Horizon |
Helps
decide whether the investment should be for the short term or long term. |
|
Risk-Taking
Ability |
Helps
assess how much market volatility the investor can tolerate. |
|
Past
Performance |
Helps
understand how the fund has performed under different market conditions. |
|
Costs
and Expenses |
Helps
investors understand the costs associated with the investment. |
|
Investment
Strategy |
Helps
understand which types of stocks or other assets the fund invests in. |
Are High Returns Alone Enough?
Suppose a
fund delivered 25% returns last year. Investing in it simply because of that
performance may not necessarily be the right approach.
Similarly,
a fund should not be selected merely because it performed well over a short
period. Investors should also examine how the scheme performed during different
market conditions and how it compared with other schemes in the same category.
What Should SIP Investors Keep in Mind?
Investors
who invest a fixed amount every month through a Systematic Investment Plan
(SIP) should avoid changing their fund every month simply by looking at
which fund delivered the highest returns.
The first
step is to identify the financial goal. The investment time horizon
should then be determined. Based on these factors, investors can decide the
appropriate investment category and select a Mutual Fund scheme that suits
their requirements.
A Special Investor Awareness Programme
An
investor awareness programme titled “To Grow Your Wealth... A Top Fund or
the Right Fund?” is being organised by Wallet Wealth LLP.
The
programme will be held online on Saturday, October 10, 2026, from 5:00 PM to
6:30 PM.
The
session will be addressed by S. Sridharan, Chief Executive Officer of Wallet
Wealth LLP and SEBI-registered Investment Adviser.
The
programme will be moderated by C. Saravanan, former Executive Editor,
Nanayam Vikatan.
When
investing in Mutual Funds, instead of asking only “Which fund has generated
the highest returns?”, investors should ask:
“Which
fund is suitable for my financial goal, investment horizon and risk-taking
ability?”
Rather
than simply searching for a top-performing fund, choosing a fund that
is appropriate for one’s financial goals and circumstances can be an
important part of a long-term wealth creation strategy.
Register in advance:
WhatsApp / Call: 99401 16967.
For more details and Investing:
S.Sridharan, CEO & and Principal Officer, https://www.walletwealth.co.in/
SEBI Registered Investment Advisor-INA000020998
If you need any advice on
investments, do call us at 9940116967.
Team Wallet Wealth,
AMFI Registered Mutual Fund
Distributor
2nd Floor,
No.8A, 2nd Main Road, Nanganallur,
Chennai – 600 061
Ph: 044-48612114
https://www.walletwealth.co.in/
Email id: sridharan@walletwealth.co.in
ARN 173466
You can contact Mr.S.Sridharan for all types of investments
including mutual fund investment, medical insurance, and life insurance.
Read articles written by Mr. S. Sridharan in Nanayam Vikatan, a
leading personal financial management magazine https://www.vikatan.com/author/855-sridharan-s
Buy “Neengalum Kodeeswarar Aagalam!” (நீங்களும் கோடீஸ்வரர் ஆகலாம்! தமிழ்), written
by Su. Sreedharan and published by Vikatan Publications. https://books.vikatan.com/personal-finance-and-business/neengalum-kodeeswarar-aagalam
Mutual Fund investments are
subject to market risks, read all scheme related documents carefully.
