The securities quoted are for illustration only and are not recommendatory.
Returns are point-to-point and in %. Direct Plan-Growth option.
Data as of May 27, 2024
(Source: ACE MF, data collated by PersonalFN) <\/p>\n\n\n\n

Thus, barring a few schemes, the performance of solution-oriented mutual funds has not been noteworthy when compared to the relevant benchmark indices and diversified mutual fund schemes.<\/p>\n\n\n\n

Solution-oriented funds vs diversified funds: What should investors choose?<\/strong><\/p>\n\n\n\n

While the lock-in period in solution-oriented funds ensures that you, the investor, stay invested for the long term to reap the benefit of capital appreciation, if the scheme underperforms you may fall short of the desired corpus.<\/p>\n\n\n\n

On the other hand, when you opt for diversified mutual funds such as Large Cap Funds<\/a>, Flexi Cap Funds<\/a>, Value Funds<\/a>, Aggressive Hybrid Funds<\/a>, etc. you have the option to switch or redeem if the scheme falters (owing to various reasons) and move to the best-performing and suitable schemes. This nimble approach usually helps potentially clock an efficient return on investment and accomplish the envisioned financial goals.<\/p>\n\n\n\n

Another benefit of opting for diversified mutual funds is that investors can tailor the portfolio as per their risk profile, and investment horizon. For instance, if an investor wants to adopt an aggressive approach to boost the portfolio returns, they can consider adding exposure in Mid Cap Fund and Small Cap Fund categories. Likewise, if their goal is to earn stable returns from equities, they can add Large Cap Funds to their portfolio.<\/p>\n\n\n\n

Moreover, investors can set the desired equity-debt allocation ratio as per their preference by selecting the suitable schemes across asset classes, which may not be possible with solution-oriented funds.<\/p>\n\n\n\n

Final thoughts<\/strong><\/p>\n\n\n\n

Drawing a personalized asset allocation plan and then diligently choosing the most suitable schemes for the portfolio is a must for achieving your envisioned financial goals.<\/p>\n\n\n\n

Therefore, don’t just simply depend on Solution-oriented Mutual Fund Schemes; they aren’t a definitive solution to plan for your financial goals. Instead select among the diverse categories and sub-categories of mutual funds as per your risk profile, investment objective, and investment time horizon would help you succeed in providing for your child’s future needs and living a blissful retirement.<\/p>\n\n\n\n

[Read: <\/strong>What Should Be Your Mutual Fund Asset Allocation Strategy Amid Rising Global Uncertainty<\/a>]<\/p>\n\n\n\n

Broadly, here’s the approach to achieving your financial goals:<\/p>\n\n\n\n

• You must know the cost of living and education expenses in today’s terms. For example, if you are planning to send your child abroad for higher studies, estimate the corpus you will need currently to cover all the expenses.<\/li>
• Assuming the rate of inflation appropriately, then forecast the amount you would need in future, say 15 years down the line.<\/li>
• Thereafter, arrive at the amount you might need to invest every month in various asset classes such as equity, debt, gold, and real estate, depending on the return expectations, risk appetite, and the years left to fulfil the financial goal.<\/li><\/ul>\n\n\n\n

  Ensure that you choose the best schemes from each category\/sub-category after evaluating them on various quantitative and qualitative parameters.<\/p>\n\n\n\n

  Watch this video to know the 7 factors to choosing the best mutual funds:<\/p>\n\n\n\n