With so much transparency, access to information and expert advice available through the internet and media -- print and electronic -- evaluating a mutual fund should be child's play. Well if that's what you think here's news for you. It is not.

While it is definitely easier to make a selection now vis-a-vis the earlier days, it still requires careful study of the funds available, market situation and equally important, your own circumstances.

Even before you start examining the funds available, you should first be clear about your objective. What is the purpose of your investment? Are the savings that you are planning to invest meant for a specific purpose? That is, is it meant for your child's education 10 years away?

Or is it for a foreign vacation you want to take your family to after 3 years? Or is it some surplus money which presently you do not require for anything but can think of it for retirement?

Depending on your motive, it will be easier to study the funds available.

Say, it is for your child's education 10 years away, equity funds would be a better option. But if it's for a goal within 3 years, then it would be better to invest in a debt fund to protect the money you have put aside for this goal.

Essentially you need to understand your objectives and the time horizon of your need so that you can then evaluate those mutual funds which are appropriate for this objective.

Coming to the fund, here again the objective is important to evaluate, this time the funds!

Do pay attention to the stated objective of the fund and then crosscheck this at least over the last 8 quarters and verify if the fund has stuck to the said objective. A mid to small cap fund in all possibility will generate higher returns in good times when compared to a large cap fund.

But it is accompanied with higher risk exposure as well and more likely to lose value in falling markets then a large cap fund. So if you invested in a fund, thinking it would give relatively stable returns with lower risk and found out later that the fund is actually venturing into mid cap and small cap stocks then there is an obvious mismatch to your objective.

Then the next attribute to be seen is the lineage of the fund. Who are the promoters of the fund? What are the systems and processes followed by them? With so many new players in the market, foreign tie-ups, here today-gone tomorrow instances, it is better to go with a fund house that has been around in the Indian market for at least some years.

A foreign player isn't strictly a NO, provided the company has its own track record of impressive, consistent and long standing performance in the countries that it operates in.

The fund manager also has an important role to play in the evaluation of the fund. But where recent history shows most of them, barring a few, always on the move to the next company, it would be prudent to look at the fund house.

Now, coming to past performance. The bane for many financial advisors, since often clients will quote the top 3, 5 or 10 funds touted by such and such magazine, paper, TV programmer or website and demand why none of them are present in their portfolio. Past performance is definitely an important criterion for evaluating mutual funds, but this needs to be put in perspective.

One-year, 2-year or even 3-year returns and performance is not sufficient. If we took the 3-year performance track record of most funds from 2005-2007, we would get excellent returns on all of them. But the same funds would give completely different picture if you saw their 3-year return over 2008-10.

Select funds that have done well across market cycles and investment cycles -- funds that have performed consistently -- in good market, bad market, quiet market and roaring market. Your choice should figure in the top 10-15 schemes that have performed consistently over a 5-year period.

An important point to note is the performance of the fund vis-a-vis the benchmark. Last but not the least, keep an eye on the expense ratio of the funds, if it is too high compared to its peers and not justifying the cost with its performance; it may be a good idea to mark it away.

Ultimately, the fund should match your risk profile and appetite and suit your objective.