Best SIP Mutual Funds To Invest In Oct 2017

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Best mutual funds to invest in Oct 2017 

Many new investors are flocking to mutual funds these days. However, many of them hit the first hurdle immediately: how to put together a few schemes or create a mutual fund portfolio. This is because many investors believe that creating a mutual fund portfolio involves several complicated steps. To begin with, an investor needs to shortlist a few schemes with a consistent long-term performance record. Then s/he should pick the ones that are in line with the risk profile and investment objectives. Then the biggest problem: how to fix the composition of the portfolio. The task doesn't end here. Then they also need to monitor and review the performance of the portfolio at regular intervals and take remedial steps if needed.
ET.com Mutual Funds is here to help you. We have been recommending equity mutual fund portfolios for SIPs every month since October 2016. The portfolios have been created for three different individual risk profiles: conservative, moderate and aggressive. We have also considered three SIP baskets - between Rs 2,000-5,000, between Rs 5,000-10,000 and above Rs 10,000 - while creating the portfolio.
We monitor the portfiolio on a regular basis and recommend the required changes whenever we think is necessary. We are happy to tell you that there is no change in the portfolio this month. You can see the SIP portfolios below.
conservative october 2017

moderate october 2017

agressive october 2017

We have only considered equity diversified and equity-oriented balanced funds for recommendation. We have also assumed that the investor is investing with an investment horizon of five years. 
Keep looking for our monthly review of the portfolio in the first week of every month. 
Methodology.
 
1. Mean rolling returns : rolled daily for the last three years. 

2. Consistency in the last three years : The three-year period is divided into smaller time periods each with a progressing weighting. 

3. Downside risk : We have considered only the negative returns given by the mutual fund scheme for this. X =Returns below zero Y = Sum of all squares of X Z = Y/number of days taken for computing the ratio Downside risk = Square root of Z 

4. Outperformance : It is measured by Jensen's Alpha for the last three years. Jensen's Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the market. 
Average returns generated by the MF Scheme - [Risk Free Rate + Beta of the MF Scheme * {(Average return of the index - Risk Free Rate} 

5. Asset size : For equity diversified funds, the threshold asset size is Rs 100 crore, and Rs 50 crore for balanced funds.
We have also conducted a back testing of our model portfolios. These returns are forward returns from the base date.

(Disclaimer: past performance is no guarantee for future performance.)

Source : ET 

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