For a more informed investor who has the time to research, I would recommend selecting mutual fund schemes to invest in based on the following criteria.
- Longterm Performance , consistency in Returns
- Short Term Performance (though a fund has performed well in the past, is there a let down in short to mid term performance)
- Performance across market cycles, like during bullish and bearish phases (how well did the fund perform during the bearish phases)
- Fund Corpus (When selecting midcap funds, the corpus size is very important)
- Fund Managers performance with the scheme(If a fund just got a new fund manager, I would observe the performance under this new manager before I select the fund)
- For equity mutual funds, one will also need to evaluate risk. (Exposure to midcaps, Standard Deviation of the fund)
- For debt mutual funds, apart from risk one also need to examine entry/exit loads and expense ratio are very important.
In these days it is very difficult to find an unbiased financial advisor. Always validate the advise your receive by doing some research online so you know you are not being taken for a ride. Please stay away from NFO's as much as possible.