How to use a Mutual Fund analysis App like a Pro?

Published on 2020-11-26 22:16:28
4 min read

Mutual Funds have been gaining immense popularity in India. In 2009, the total investments by Indians in various Mutual Funds stood just above Rs.5 trillion. After 10 years, as of 2019 that number has scaled to over Rs.23 trillion.

This surge in demand for mutual funds enticed many financial companies, both domestic and international to start offering various types of investment schemes and products under the garb of Mutual Funds.

Today there are well over 44 mutual fund houses in India which together offer over 2500 types of mutual fund schemes for investors to choose from.

With the advent of the internet and smartphone, investing in any of those 2500 funds could not have been any simpler.

There are a number of apps which offer an incredibly detailed insight into the world of mutual funds and also offer varied tools to help us choose the right fund to invest.

But even then, any interested person who does a quick Google search of ‘invest in a mutual fund’ would be quite intimidated by the sheer amount of information and numbers that might be thrown at him.

Before we get into how you should analyse mutual funds, let’s discuss the basics first.

What is a Mutual Fund?

A Mutual Fund is an investment scheme which is created by accumulating a large pool of money which forms a fund corpus. This corpus is basically the investments made by like-minded people with similar financial objectives. The fund corpus is then invested in various financial instruments such as equity, debt (bonds, G-secs), gold and real estate etc.

Each investor owns a fixed number of units in the fund which is proportionate to their investment amount. Any gains that the fund makes is then distributed amongst the investors proportionately.

Types of Mutual Funds:

This is where things begin to get a little complicated.

Mutual Funds schemes are generally classified based on the instruments that they invest. Each financial instrument is unique and performs differently to each other at any given times. A few examples of such instruments are:

  •   Equity and equity related instruments- These are basically investments in the stock markets.
  •   Debt and related instruments – Corporate Bonds, Government Securities, Money Market Instruments etc.
  •   Gold and other precious metals such as Silver.
  •   Arbitraging – A method which takes advantage of the mispricing of the same underlying in different exchanges.
  •   Real Estate and Infrastructure linked investments.
  •   Investing in Startups
  •   International stocks and debt investments – investment in overseas stocks and bonds.

Based on the above asset class that the fund invests in, mutual funds can be categorized broadly as Equity Funds, Debt Funds, Hybrid Funds, ETFs and Overseas Funds.

Now that we are aware with the basics, it brings us to one of the first steps of Mutual Fund analysis using the StockEdge app:

Analysing Mutual Funds using StockEdge mobile app:

  1.   Know which category you wish to choose

On the StockEdge app, you can select the Classes option under the Mutual Funds tab. Here you will get information about each mutual fund category and the details about their returns, risk levels, tenure and a list of funds that belong to a particular category.

Depending on your financial goals and risk levels you can either invest only in one fund category or divide your investments between multiple schemes.

  1.   Choose the right Mutual Fund company

Once you have chosen the category you want to invest in, then you should analyse the fund houses. Under the AUM tab on the app, you will get a list of all major mutual fund companies with their respective total asset under management. Though it is not important to go with the companies with the highest AUMs, it is recommended to not go with extremely small AUM companies either.

  1.   Research about the Fund Manager, returns, portfolio and tax implications

After understanding about the Mutual Fund companies and the various fund categories, you should research the fund manager’s past performances, the returns from a particular fund and its composition or holdings and your tax implications from investing in that fund. You can do all of this by clicking on the fund manager and schemes tab on the app.

  1.   Get mutual fund investment ideas by StockEdge experts

Another feature which is unique to StockEdge is the Mutual Fund Investment Themes tab. Here you will get thematic ideas for mutual funds. For eg. The Tax Saving Investments theme will contain a list of the best tax savings schemes you can invest in. The list is prepared by StockEdge’s expert team of researchers after a thorough analysis of each scheme.


Author’s Bio


Raghav Agarwal is a graduate in Business Administration. With a keen interest in the world of financial markets, he loves to read and write about various financial instruments. Currently he is working with Elearnmarkets.com as a member of the Knowledge team.