Don't sabotage your FY25 portfolio! Avoid these 5 mutual fund mistakes

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Neglecting research: One of the gravest mistakes investors make is diving into mutual funds without conducting thorough research. Before investing, take the time to understand the fund's investment objectives, historical performance, fund manager's track record, expense ratio, and risk factors. Ignoring this step can lead to investing in funds that may not align with your financial goals or risk tolerance.

Overlooking asset allocation: Asset allocation is key to managing risk and maximising returns in your investment portfolio. Neglecting to diversify across various asset classes like equities, bonds, and commodities can expose you to unnecessary risk. Ensure your mutual fund investments are spread across different sectors and asset classes to minimise the impact of market volatility.

Chasing past performance: It's tempting to invest in mutual funds with stellar past performance, but this strategy can backfire. Past performance is not indicative of future results, and chasing hot funds often leads to buying high and selling low. Instead of solely focusing on historical returns, prioritise funds with consistent performance aligned with your investment objectives and risk tolerance.

Ignoring costs: Mutual fund expenses, including management fees, administrative fees, and other charges, can eat into your returns over time. Ignoring these costs can significantly impact your investment's profitability. Before investing, compare expense ratios across different funds and opt for low-cost options to maximise your returns.