Can AI Predict the Right Mutual Fund for You

Selecting the right mutual funds from the numerous mutual fund schemes available can be challenging. You might spend hours looking at past returns, reading fund factsheets, and trying to figure out what terms like "expense ratio" and "alpha" mean. Things are changing, though, and technology is making it much easier to invest.

One of the most significant developments is the growth of AI, or artificial intelligence. No, AI isn't just chatbots or cars that drive themselves. It's also being used to help investors like you select mutual funds that are better suited to their needs.

But the big question is, can AI really choose the best mutual fund for you?

The answer is that it can't tell you what will happen in the future, but it can help you make much better decisions than it ever could before.

How AI Works in Mutual Fund Selection

AI is designed to analyse vast amounts of information, far more than any human advisor could. It looks at things like:

• How a fund has performed in the past across different market conditions

• What the fund invests in (like equity, debt, or a mix of both)

• How risky it is and how much it fluctuates

• Market trends and economic data that could affect returns

• Your investment behaviour, goals, and risk tolerance

Based on all this, AI tools suggest funds that match your needs.

For example, if you're a careful investor saving for retirement, the AI might suggest a balanced or hybrid fund that focuses on stability and risk mitigation. If you're younger and comfortable taking on more risk, consider recommending a mid-cap or equity fund with higher growth potential.

Personalisation: AI's Biggest Advantage

The best part about AI is how personalised it can be. Traditional recommendations often feel "one size fits all," but AI goes deeper. It considers your income, goals, time horizon, and even your spending habits.

Where Human Advice Still Matters

Even though AI is powerful, it is not perfect. It excels at analysing data, but it doesn't understand human emotions, such as how comfortable you are with market fluctuations or how important specific life goals are to you. That's why many experts suggest a balanced approach. Use AI for research and fund selection, but consult a financial advisor for more complex decisions, such as tax planning, estate planning, or long-term strategy.

Why Mutual Funds Still Matter

One of the most effective ways to grow your money over time is by investing in mutual funds. You can start investing with as little as ₹500 or ₹1,000 a month with a Systematic Investment Plan (SIP). Over time, diversification and compounding work together to increase your money steadily.

The Bottom Line

AI cannot tell you which mutual fund will do the best, but it can help you make the right choice much more easily and accurately. It eliminates much of the guesswork in selecting the right fund by analysing data and aligning investments with your goals.

The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The document has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable.

SIP does not assure a profit or guarantee protection against loss in a declining market.

An Investor education and Awareness initiative of Aditya Birla Sun Life Mutual Fund

All investors have to go through a one-time KYC (Know Your Customer) process. Investors to invest only with SEBI registered Mutual Funds. For further information on KYC, list of SEBI registered Mutual Funds and redressal of complaints including details about SEBI SCORES portal, visit link : https://mutualfund.adityabirlacapital.com/Investor-Education/education/kyc-and-redressal for further details.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully

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