IS YOUR fund FARING WELL?

Outlook Money's India's Best Funds 2024 issue aims to empower you with valuable insights and analysis, to help you make informed decisions on the funds you already own or the ones you plan to invest in

- Kundan Kishore

India's vibrant democracy is currently immersed in the festival of elections. By the time you would be reading this, the results for the Lok Sabha elections will probably be out. In some ways, the process of elections and investments are not so different.

Just like it is crucial to choose who you vote for by considering the value it can add to the economy, policies and the social fabric of India, it is also important to choose the right mutual fund (MF) that can add value to your investment portfolio across market cycles.

Elections give an opportunity to you to consider the past performance of a party or government and assess their potential for delivering better outcomes in the future. Of course, out of these, performance tops the list as that differentiates winners from losers. Performance is also a crucial metric, among others, to assess an MF.

The popularity of MFs has grown by leaps and bounds--the total assets under management (AUM) of the industry has gone up 37.29 per cent, from *41.53 trillion in April 2023 to 57.01 trillion in April 2024. Till a few years ago, the MF industry was dominated by institutional investors, but now individual investors command 60.5 per cent of the AUM. Interestingly, the share of equity-oriented schemes is 58.1 per cent of the AUM, and 88 per cent of it is coming from individual investors, showing their preference for the category.