The UNfounded Hype surrounding Mutual Funds is fantastic, millions and millions of Google searches per month indicate how many people consider this a simple way to quickly diversify, hedge and profit. But is it true? Let’s take a look.

It is widely accepted that “Mutual Funds are a simple way to diversify your assets.” -Don’t kid yourself, most of them are sector driven, in other words, instead of owning some stock in a coal company you own shares in a company that owns stock in ten coal companies. This is hardly diversified.

But then, investing in a massive Mutual fund that owns other smaller ones is the answer, right? No. You are still not diversified. Even the massive ones are not usually international, they are confined to one market or Country. If the market tanks or the Country’s currency tanks, you will feel very inadequately diversified.

“Hedging”, is not another way for the fund to turn a profit, It is a form insurance against losses, and costs the fund profits, if it makes any. If you are only looking to protect your money, bury it. But I thought the goal was profits?

Profits, what profits? Even top performing ones do not usually beat the rate of inflation. Do a search on MSN or Yahoo for “top performing Mutual Funds”.. blech!

The strategy is inherently difficult to produce substantial profits:

* The manager must follow the rules of the fund, imagine Warren Buffet Following rules, instead, Berkshire is just his portfolio, he makes his own rules (as a trader should), and follows them strictly.
* Mutual Funds are “Buy and Hold” structured, which is difficult when the economy or market or market sector is imploding and money is constantly deflating.
* Mutual Funds have fees that have nothing to do with performance. This is a huge factor in the small returns on your investment. You are essentially paying their wages and mortgages before profits are calculated, the fund may have seen a profit before it had to pay it’s own expenses. And now, paid, is showing a loss. Performance fees are the answer, but none work on that basis.

In most mutual funds you have no idea of the manager -what his track record is like, not the fund’s track record, HIS track record. Again, Don’t kid yourself, in any fund you are essentially investing in the manager. He is at the helm. But in this case, the cards are stacked heavily against him, that is why it so miraculous that a few of them make it through a crisis. And rightly so, they become famous and influential.

Now “Hedge Funds” are much better suited to the investor, but they are usually exclusive and require very large deposits.

Basically, they are the answer for high net worth individuals. But again, they have a downside too, they are not liquid in that, you are not buying shares in a fund, you actually own a piece of the pie. Many of the investments they specialize in are creative and illiquid. Like long term Real Estate Ventures. 5 years is a short term investment in a Hedge Fund.

I hope I have helped a little in the riddle of where to put your money. -Look elsewhere.

I do not want to give you answer to the question, “Where do I put my money” Just like I do not want to give you many quotes from respected individuals so you will take my word without inspection. I would much rather you did your own research and came up with your own answers.

Start your research at: http://the88plan.com

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One of the top Mutual fund for the year 2010 is:

UTI Master Value Fund – Growth Option:

The current NAV as on July, 2010 is Rs 50. The past returns from this scheme are mentioned below.

* 6 months is 9.9 %
* 1 year is 80 %
* 2 years is 30.6%
* 3 years is 16.3 %
* 5 years is 19.2 %

This is an open ended fund with growth Option. This fund has an assets worth Rs 487 crores as on May, 2010. The minimum amount to be invested for this scheme is Rs 5000. There is no entry load for investing in this scheme. There is no exit load for this scheme if you withdraw your investment after 1 year. If you withdraw your investment within a year, then there will be a exit load of 1%. This scheme was launched in the year 1998.

Next Step: Start investing in the best mutual fund:

You have to spot similar best schemes of the year 2010 and invest in that. You can find those details in the related websites.

Click here to get the details of ——>> best mutual funds. You can get the details of the other schemes available in the indian mutual funds.
Kamalkk Kannan

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• how to identify good mutual fund malaysia
• top funds in malaysia 2010

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The top mutual funds offer you an investment advantage year after year and they can prove it. These are your best investment if, like most people, you need help managing your investment assets. I call them investor friendly simply because they do not charge you an arm and a leg when you invest money with them; plus they offer good service and a broad array of investment options.

Mutual funds are sold to investors and managed for them by mutual fund companies or families. Some market their funds through middlemen and pay professional money managers big bucks to actively manage their funds in an attempt to outperform their competitors and/or benchmarks. Then they pay big bucks to advertise. Who pays for all of this? Put another way, do you always get what you pay for?

Since NO mutual fund can prove that it consistently outperforms its competition, it makes no sense to look for the top mutual funds based on past investment performance. Middle- men can cost YOU sales charges of 5% or more off the top when you invest money. Active professional management and high marketing expenses and other services can cost you 2% or more a year to just hold your investment. I don’t call that investor friendly. No, you do not always get what you pay for.

The top mutual funds, in my opinion, work with you and not against you by operating efficiently and honestly while passing the savings on to you. Some of the largest fund companies in America work directly with investors and offer good service at low cost. In my opinion this represents the average investor’s best investment. Simply put, all costs associated with investing work to eat away at your investment earnings. For example, if you can get 2% interest a year at the bank, why pay 3% off the top and more than 1% a year to earn 5% or 6% in a bond fund?

Here’s how to find the top mutual funds that are investor friendly with low costs. Start by going to the internet and searching “no-load funds”. These funds have NO SALES CHARGES or commissions when you invest directly with the fund company. Then go to a couple of the sponsor sites at the top of the page. For example, Vanguard, Fidelity and T Rowe Price will likely be there. They are large mutual fund companies.

Then go to one of these sites and search for INDEX FUNDS. These funds do not actively try to beat their competition or benchmark (which is an index). They simply invest in line with the index to duplicate its performance. By doing this they save on management costs and pass the savings on to you. Since few funds consistently beat their benchmark, and many perform worse, why take a chance and pay extra for active management?

Check out the EXPENSE RATIO of the various index funds a company offers. Since these are no-load funds there are no sales charges, but all funds charge for yearly expenses. For example, you can find stock and bond index funds with expense ratios of less than ½% a year. Basically, that’s your total cost of holding that investment for a year. A low cost of investing gives you higher net profits, and works to your advantage year after year.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

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