Which mutual fund should I pick? Start here
Value, growth, GARP, blend… Understand styles and choose with confidence
The biggest challenge with mutual funds?
Not that there are too few good ones.
But that there are too many options and too little clarity.
If you’ve ever scrolled through a list of schemes large-cap, flexi-cap, multi-cap, sectoral, index you’ve probably felt overwhelmed. You’re not alone.
Most people respond to this overload by:
Chasing last year’s top performers
Picking funds with 5-star ratings
Asking friends, relatives, or YouTube “experts”
And yet, a year later, many investors feel confused, disappointed, or restless.
Why does this happen?
Because most people never pause to consider one crucial missing filter:
The Missing filter: Investing style
Many people ignore this not because they disagree, but because they never felt the need. I was the same. Until recently.
I’ve come to see how much this filter helps me stay grounded.
Earlier, I was using all the wrong filters driven by emotion and temptation. And while it sounds easy to say:
“Don’t look at past returns.”
“Ignore star ratings.”
“Avoid chasing performance.”
In practice, it’s incredibly hard.
When you’re choosing a fund and the screen flashes “Top Performing Fund,” it’s difficult to resist. Going against that feels unnatural. You start doubting your decision even before you invest.
After all, you’re not running the fund yourself. And if it underperforms, it feels like you made a bad bet without a solid reason. It’s uncomfortable.
That’s why I decided to follow a process that minimizes emotional decision-making. One that helps me sidestep those tempting but unreliable shortcuts. Because I’ve already seen where that path leads.
Style-based investing gave me structure
It helped me refocus. To stop obsessing over maximizing returns in funds I don’t even control.
Because a mutual fund’s returns depend on three factors:
The performance of the underlying assets (stocks, bonds, etc.)
The decisions made by the fund manager
Investor behavior yes, even yours
If enough investors panic, withdraw, or act irrationally, it affects how the fund is managed. You may not agree. I didn’t either until I saw firsthand how our collective behavior reflects in fund performance.
The goal isn’t to pick the “Best” style
Whether it’s value, growth, momentum, or quality no style wins all the time.
If someone says:
“Value always beats growth.”
“Momentum is the best long-term strategy.”
Just smile.
Because what truly matters isn’t prediction it’s fit. Own what you understand. Stick with what suits your temperament. That’s how you stay invested through good cycles and bad.
You don’t need to go too deep into every investing style. Just understand, at a high level, what each style means. Then, visit the fund’s website and see how they describe their approach. If the fund has a YouTube channel, watch their videos to hear how they explain their investing style in their own words.
Also, make it a habit to read the fund factsheet occasionally which you receive every month if you’re an investor. This document gives you insights into how the fund is managed and what’s driving its performance. I’ve written a separate post on how to read a fund factsheet and decode the commentary, which you may find helpful.
Let’s look at the main investing styles fund managers typically use:
1. Value Style ,The bargain hunters
“Buy low. Wait long.”
This style focuses on finding undervalued stocks trading below intrinsic value.
2. Growth Style , The Expansion Believers
“Back the winners. Ride their momentum.”
This approach favors companies with strong earnings growth and scalable business models.
3. GARP (Growth at Reasonable Price) ,The thoughtful middle
“Balance growth with fair valuation.”
Avoids both overpriced momentum plays and distressed value picks.
4. Quality Style ,The safety-first approach
“Stick with resilient businesses.”
Prioritizes companies with low debt, strong cash flows, and good governance.
5. Blend/Core Style ,The all-weather portfolio
“Mix it all , stay flexible.”
Combines elements of growth, value, and quality.
A Simple but crucial reminder
Next time you scroll through mutual fund options, pause.
The metrics returns, star ratings, performance charts only show what a fund achieved.
They rarely tell you how or why.
The real work isn’t chasing outcomes.
It’s understanding the process behind them.
Because over time, outcomes are simply consequences of a process applied consistently.
Final thought
There are hundreds of mutual funds in India. You don’t need hundreds.
You just need a few that align with:
How you think
How you feel
How you behave when markets get tough
Returns will always fluctuate. But conviction the quiet confidence that keeps you invested only comes from choosing funds that fit your temperament.
One last tip
Avoid picking individual stocks based solely on styles or themes unless you have the experience and discipline to handle the consequences. Without that foundation, it rarely works. Not for me. And probably not for you either.
Use curiosity, not FOMO
Next time someone says:
“My fund is doing really well!”
Don’t feel FOMO.
Don’t rush to compare.
Use that moment to ask yourself:
Do I truly understand my own fund?
What is its investment philosophy?
What kinds of companies or assets does it hold?
In what market conditions does this style do well or struggle?
Does this approach align with my temperament?
Because once you understand your fund not just its returns you stop reacting to every blip. You start seeing it as what it is: a tool to serve a purpose in your financial life. That clarity is worth far more than any single quarter of outperformance.
When people talk about returns or underperformance, just remind yourself:
That’s not the primary metric I care about.
I’m fine, as long as I understand my fund and its investing style.
Coming up next
In the next post, I’ll share a practical framework to build a resilient, diversified mutual fund portfolio, grounded in clarity not confusion. If you’re reading this on the Substack app, bookmark this guide to revisit when you’re ready to choose your funds. If not, consider downloading the app it helps you save and track future posts easily.
Because in investing, knowledge alone isn’t power. Applied knowledge is.
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