Getting on a 15-year investment journey via SIPs in mutual funds is like preparing for a marathon, and choosing the right mutual fund is like selecting a good pair of running shoes. Here’s how you can make this decision:
- Philosophy Over Specifics: Rather than pinning a specific fund today, it’s more ethically aligned to adhere to a clear investment philosophy. In the long run, fund managers and market conditions can change, but a consistent investment philosophy will act as a guiding star. Look for funds that adopt the ‘Roots and Wings’ approach – investing in businesses with strong fundamentals (Roots) while also identifying those with significant growth potential (Wings).
- Quality over Quick Gains: High-quality stocks, represented by companies with solid balance sheets, low debt, high return on equity, and top-tier management, tend to weather market fluctuations better. Mutual funds focusing on such stocks might not always top the charts in bull markets, but they usually stand firm during downturns, leading to better compounded returns over long periods.
- Diversify Across Fund Classes: Instead of relying on just one ‘best’ fund, diversify across different types of funds – large-cap, mid-cap, and small-cap. This strategy helps to balance out the risks and provides exposure to different segments of the market.
- Ethical Concerns: Recommending a fund now and asking to exit after some time doesn’t sit well ethically. Remember, long-term investing isn’t about timing the market, but time in the market. Ensure that the mutual fund you choose sticks to its stated objectives and doesn’t shift its goalposts frequently.
- Review and Rebalance: While a 15-year horizon allows for a buy-and-hold strategy, it’s vital to periodically review your portfolio. This doesn’t mean chasing short-term performance, but rather ensuring that your SIPs align with your evolving financial goals.
To sum up, while I can’t earmark a specific ‘best’ mutual fund, I can advise you to prioritize quality and consistency. Mutual funds that have a history of sticking to their quality mandate, with a clear and consistent strategy, are likely to be beneficial for long-term SIP investments.
If you’re seeking an ally in your investment journey, Jama Wealth’s SEBI Registered Investment advisory services can provide guidance. By focusing on principles rather than mere products, we aim to help investors build robust portfolios tailored to their unique goals.
