Best types of mutual funds

 Which mutual fund should we select? Many funds gave good returns in last few years. So which fund give best return on future. So how can we select best fund? 

Mutual funds offer various opportunities for us to grow our money. These mutual funds very popular in developed countries like USA. So let's see what are types of funds are there:-

1. Sectoral funds:- These funds are quite risky. Because they focus on some special sector like pharma,IT,fmcg, banking sector etc. So it's better to stay away from these funds because they are very volatile. So this can be a risky investment for some people.

2. Growth funds:- some funds invest their money to high growth companies. They give your portfolio exposure to high growth stocks like Coca-Cola and other fmcg or IT companies. But the main problem is their valuation is too high. 

3. Value funds:- one of the best funds in the market as they invest their money to value stocks or undervalued stocks. If you are a long term investor or your time horizon is minimum 5 years these funds can give to higher return. So you should invest your money to value funds as they are best for long term investment.

4. Balanced funds:- these funds invest money to stocks and bonds also. And they are trying to time the market which is not good. No one can time the market not even great investor Warren buffet also. So you should avoid this funds.

5. Focused funds:- these funds are great if your risk taking capacity is little higher. As they are very focused they invest money 20-25 stocks to gain maximum return. So focused fund should be there in your portfolio.

6.ELSS funds:- The investor in ELSS fund get a tax rebate under section 80C of income tax act. If you are paying tax then you should invest your money to a stable ELSS funds to get tax relaxation. For more updates click this link http://mudrainvest.com