The most common question being asked or searched by investors is "Which fund is the best fund?"
Which Equity Mutual Fund gives the best returns?
Which funds give high return in short term?
Which Mutual Fund provides best returns with least risk?
With no doubt, a wrong question is being asked by the investors for all the right reasons. The reasons being you are investing your hard earned money and expect something in return. The point here to be noted is that fund selection is not the most important factor for wealth creation or investments. When the market falls even your best equity fund can provide a negative return.
The right process to go about investing is by starting to understand your goals, what you want to achieve from the investments being made. There is no profit in investing in a fund with high returns if you aren't willing to bear the huge risks involved with it. For example, in a horse race, there is no horse which can be called as " the best horse". It is important know as to how smart the rider is in making his way through the obstacles(the market crash/ highs and lows) to win the race, rather than selecting which horse is faster.
Most people don't plan to fail. They fail to plan!
One should invest in funds in alignment with their financial goals and risk appetite - and establish a discipline of continuing through the market ups and downs. It might be better to not invest than to invest in the "best" mutual fund just because it has been recommended by a website,rating or an app, since most such investors incur a loss and stop investing in Mutual Funds altogether!
To check the actual numbers, here is a comparison of how top large-cap funds have performed for the last few years
[Please note that just because the funds mentioned above have provided stellar returns in the past does not mean they will continue to provide good returns in the future! No one can predict fund or market performance, not even the fund manager himself.]
From the above table it is clear that there is not much difference between the returns of the funds. Hence it is safe to say that - There is "No best Mutual Fund"! Worse case situation is where, selecting the best fund is just like going to the doctor and asking him to prescribe the tablets without knowing the health issue. Now that's one issue I am worried about!
So if you have finalized your financial goals and risk profile, just picking a fund with a good track record is not much of a task. Fund selection does not matter as much as one would like to believe.
So do not ask your advisor for best funds or returns. Instead, being loyal to your financial goals, setting them on the right track, reviewing your investments and staying invested in the market are the most important factors determining your returns other than the markets.