New Delhi, Feb. 8 -- Before investing in a mutual fund, investors tend to assess the past returns of that scheme and compare the same with those of other schemes in the same category.

Aside from past returns, investors are also recommended to evaluate other factors such as the category which the scheme belongs to, reputation of the fund house, whether the scheme is active or passive, and the overall market scenario at the time of investing.

The past returns of a mutual fund may give a fair idea of how it may perform in the future. For example, if a scheme has demonstrated exceptional performance in the past, it may now be trading at a premium, and therefore, has a lower potential of growth.

And conversely, if the valuation of an equity...