1) Investment Strategy, policy and holdings.

Every fund has its own investment profile. Investors should have a clear understanding of the investment strategy taken in each fund that they are considering to ensure it is consistent with their personal investment objective and risk tolerence level. Even the funds within the same category may have significat difference in the investment holdings. For example, the risk exposure in large-cap growth companies is definitely much lower than for penny stock funds.

2) Past performance.

Investors may look into the past performance trend of the fund to gauge its future performance. Do bear in mind that the past performance may not repeated in the future and we should no be overly excited to see one year of good result if the fund is only newly established. A good fund should be the one that has been consistently out-performing it peers, be it during good and bad times.

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1) Income Funds - usually are characterised as providing consistent income to investors. These Funds invests in income-producing stocks or bonds or combination of both. Bond funds, equity funds and money market funds are included into this category.

2) Growth funds - generally are more aggresive than income funds but have the possibility or earning higher returns by focusing on the objective of long-term capital appreciation rather than income producing or short - term gain. Example small caps funds, commodity funds, index funds and gold funds.

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