Long-term investments aim to finance distant future goals, like college education, home, retirement, etc. Hence, choose a fund suitable for wealth creation. Long-term goals have a horizon beyond 10 years and equity-oriented schemes(>=65% equity allocation) are the one of the best long-term investment option. Equities have a higher potential for growth even though more volatile in the short-term as compared to hybrid and debt funds.A well-diversified equity fund is more likely to offer stable growth over the long-term.
Look for funds with higher risk-adjusted returns (Sharpe ratio) i.e. funds offering higher returns for same level of risk.Expense ratios impact fund returns over long-term due to compounding effect. Choose a fund with lower expense ratio, meaning more funds are available for investment that can boost the fund’s return over
Read more
