Fund Selection Process Flow
Category Mapping
Align asset classes and fund categories with financial objectives, investment horizon and applicable risk profile.
AMC Evaluation
Review the Asset Management Company's track record, assets under management, organizational framework and overall stability.
Rolling Return Analysis
Assess return consistency across different market periods, including relevant 1-year, 3-year and 5-year performance periods.
Risk Ratio Assessment
Evaluate relevant measures such as Sharpe Ratio, Sortino Ratio and Beta to understand risk-adjusted performance.
Cost Efficiency Review
Review applicable expense ratios and overall scheme costs while considering their impact on long-term investment value.
Fund Manager Track Record
Examine fund manager tenure, investment style, experience and consistency across varying market conditions.
Portfolio Quality Check
Review diversification, concentration levels, portfolio composition and, where applicable, the credit quality of underlying securities.
Riskometer Alignment
Evaluate the scheme's stated Riskometer level against the intended investor risk category and investment objective.
Internal Validation
Conduct a structured internal review of shortlisted schemes before inclusion within the selection framework.
Ongoing Monitoring
Periodically review scheme performance, portfolio characteristics and material changes that may affect continued suitability.
Exclusion Criteria
AMCs facing material regulatory concerns may be excluded based on the nature and relevance of the regulatory issue.
Schemes with excessive sector concentration may be avoided where concentration significantly increases portfolio risk.
Debt portfolios with inadequate credit quality may be excluded where the underlying credit profile is inconsistent with the intended risk category.
Frequent fund-manager changes may be considered a negative factor where management continuity and consistency are affected.
Mutual Fund investments are subject to market risks. Read all scheme related documents carefully. Past performance may or may not be sustained in the future. The above framework is intended to describe the factors considered during the fund evaluation and shortlisting process.