3 parameters to look at before you pick your mutual fund house !

POSTED BY manish ON September 23, 2013 COMMENTS (127)

There are more than 40 mutual fund houses (AMC) in India and every investor has his own favorite mutual fund house to pick. We hear about best mutual funds on various websites, hoardings and even look at their performance on valueresearchonline and then choose them for lumpsum investment or starting our SIP.

But on what parameters do you choose these mutual fund houses (not mutual fund) ? Will you pick Birla Sunlife or DSP BlackRock ? Will you choose HDFC or SBI mutual funds? Will you pick Quantum Mutual funds or PPFAS ? Or will it be Reliance Mutual Funds or ICICI Prudential ?

how to choose mutual fund-house

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In this article I want to talk about 4 parameters which were discussed by a Financial Planner – Dinesh JainΒ in one of the articles comments section. I am expanding them for the benefit of readers.

3 questions to ask before choosing a great fund house

1. Is asset management the core competency and passion for fund house or just another business ?

One of the things, you can look at is – “Is Asset management just another business for the fund house to make money ?”, Or is it also their passion and core competency? Will they close down the business or sell it to some other AMC, just because the revenues are down ? What kind of message do you get when you look at the fund house advertisements or their videos on internet? Take an example of Birla Sunlife mutual funds and Quantum mutual funds, do you see any difference in the way they operate or communicate ? Which fund house do you feel is more focused on asset management ? Or look at DSP BlackRock Mutual fund and Reliance mutual fund , do you get a different kind of feel in both or same ?

The first level filtering of this parameters will clean out some fund houses from your mutual fund shopping list. Note that its up-to you to decide which fund houses you think do not pass this test. You have to do your own study on this.

2. Does Fund house focus on Quality or Quantity of funds ?

The second important parameter to look at how many funds an AMC launches and for what reasons? Now, I am not saying that the fund house should not launch new funds, but do they do it, because of the demand and opportunities in market or just to cash on the market sentiments and mood ?

There are so many fund houses, who came up with new and useless NFO’s during stock market boom, just to cash on the market sentiments and named their funds in such a fancy manner that gives a feeling that the fund is so awesome ! , but when the market was bad, and they could not handle so many funds, they merged them with their other better performing funds.

So some fund houses are really an ASSET MANAGEMENT COMPANY and some are kind of ASSET GATHERING COMPANIES which just want to launch funds and their focus is on increasing the AUM, so more charges can come to them and increase their profitability. Nothing wrong in making more profits or thinking about it, but at what cost is it done is the question? Now its up to you to decide if you want to avoid these kind of fund houses or go with them.

3. How transparent and Honest is Fund House

One of the parameters you can look at is the transparency and honesty of the fund house. Look at their website, and see what kind of disclosures they have made? Do they do what they say ! , or both are different things ? Do they do their investor education program just to sell their products and schemes or genuinely they want to help investors ?

Conclusion

Picking a right mutual fund is important, but you should also do some background check on the parent fund house also before you pick your funds. Note that these 4 parameters are just for reference and it might happen that for someone these parameters does not make sense.

Can you please share what parameter you think is important one !

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127 replies on this article “3 parameters to look at before you pick your mutual fund house !”

  1. spguptahyd says:

    I saw Quantum longterm Large cap fund. its performs seems to be good. But the form and its unusual conditions etc
    scares me. Why unusual caution? Can I safely apply and SIP in this long term fund? Full one page declaration to be signed is very unusual and gives an apprehension that whether such long declaration is sought -what for?
    Please advise

    1. You can give that declaration , there is no issue in that !

  2. Sujay says:

    Hi,
    I prefer to look after two more parameters.
    1. How often the company gives NFOs, and how unique those are. In other angle, how many funds the AMC manages, and how different those funds are those objective-wise.
    2. How well they distribute their funds among the fund managers. E.g. Look at DHFL, and how many funds does Akash Singhania (43), Rakesh Puri (31) manage at once. Such workloads are bound to affect the funds performance.

    Lastly, I must say that I would personally give your first point lesser importance. Just only because the mutual fund business is a part of the companies business portforlio, doesn’t ensure that the company will put lesser importance in it in times of disaster. In contrast, companies with broader business portfolio may effectively manage those disastrous period. But all these obviously narrows down to “their passion and core competency”.

    1. Thanks for sharing these points Sujay ! ..

  3. Rajk says:

    I am investing in Quantum tax savings fund for 2yrs through SIP. Shall I continue investing in this fund? Thanks

  4. Hussain says:

    Hi , I am investing in TATA Equity P/E Fund @ 2000/- per month through SIP, roughly what will be % return if i stay invested for 3-4 years

    1. No one can tell that

  5. aadesh says:

    Hi ..I am beginner and want to invest in mutual fund for short and long term both.
    Pls suggest me best option for me ..which fund I should consider ..for 5k for each

    1. Hi aadesh

      I can see that you are interested in investing in mutual funds. I want to share that now you can invest in mutual funds with Jagoinvestor as your advisor

      We create a FREE online account for you, from where you can invest and redeem online.

      Our team will be happy to explain you more on this.

      Find more at https://www.jagoinvestor.com/start-sip

      Manish

  6. ganesh123 says:

    Hi Manish…
    I am 28 year old and just started investing and planning of my future financial life…. I am a service person and earns 20 k per month…
    I am investing in equity in small quantity in which I prefer is Intraday for making some quick bugs…. and I am taking home 1-2 K per day in intra day…
    But I Know its little risky… Now I have decided to start investing in SIP mutual funds which is better for me? I can invest upto Rs 2000 per month at this initial stage…
    Can u please suggest?

    1. ganesh123 says:

      Or I also prefer in equity mutual fund…

    2. Hi ganesh123

      I can see that you are interested in investing in mutual funds. I want to share that now you can invest in mutual funds with Jagoinvestor as your advisor

      We create a FREE online account for you, from where you can invest and redeem online.

      Our team will be happy to explain you more on this.

      Find more at https://www.jagoinvestor.com/start-sip

      Manish

  7. Mahesh says:

    Hi Manish,

    I am regular reader of your article.
    I am layman in Mutual fund investment.
    After reading you blogs i start investing in SIP.
    My portfolio is :

    SBI Blue Chip Fund G 4K
    Reliance Small Cap F 4K
    BSL MNC Fund G 3K
    FRANKLIN INDIA OPPOR (G) 4k

    Please advise about funds i invested.

    Keep it up buddy πŸ™‚

    1. Mahesh says:

      I am aged 35 and monthly take home is 1L 10K.
      Want to invest for my daughters education after 10 years.

      1. You can pick mutual funds for your daughter long term goals.

        Manish

    2. Hi Mahesh

      There is no specific comment on the funds as such. These are all good funds and you can continue investments in these.

      Manish

  8. Karthikeyan says:

    Dear Mr.Manish,
    First I would like to appreciate you for this great job of sharing your expertise.
    I am a professor aged 47 years. I would like to invest 30,000/- to 40,000/- per month for next 11 years. I request you to kindly suggest me, how I can go about it?
    Thanks and regards,
    Karthikeyan.M

    1. Hi Karthikeyan

      We can help you in setting up your SIP and also help you with analysis and tracking. Just let us know if you want this?

      Manish

  9. Mohit says:

    Hi, I have the following SIPs and wish to aggressively invest over next 3 years after which I expect my high income to stop. But I will hold on to these investments for a good 12-15 years. Please suggest if chosen funds are okay –

    SBI Bluechip Fund – 40k
    HDFC Midcap Opportunities – 30k
    UTI MNC Fund – 30k
    HDFC Infrastructure Fund – 15k
    Reliance Nifty Index Fund – 15k
    UTI Equity Fund – 30k

    I have total portfolio size of about 2 cr now along with above SIPs over next 3 years.

    My question is –

    1) would the portfolio look at about 10cr in say next 12-15 years when I will start to withdraw and fund my income from it?

    2) I can invest about 50k more each month. Which funds are recommended pls

    1. I would rate SBI bluechip, HDFC midcap as better funds out of all 6

  10. JAYESH says:

    I want to invest monthly 3000 rs in SIP mutual funds (growth) for 2-3 years. Which is now best mutual fund to invest .

    1. You can look at L&T India Prudence Fund

  11. Hi Manish,

    I need your suggestion .
    My mother will be retiring in next 6 years.After 6 years to get her a decent amount apart from her savings and PF amount I have invested in two mutual funds in SIP mode.
    1.Franklin India Prima Plus – Rs 3000
    2.Birla SL top 100 -Rs 3000
    Is my selection good choosing these two funds for a span of 6 years?
    I am assuming a amount of 8-10 lacs with 12 % returns after 6 years.

    1. Yes, these are really great funds. However make sure you keep an eye on them over these 6 yrs !

    2. Tarun says:

      Hi Manish Sir,
      Really appreciate your work.
      I am a medical student from a decent background.
      I have 2 queries!
      1. I want to invest 3k as a high return high risk funds SIP, i narrowed it to few choices after reading many articles online, could yu please suggest the best one as am an amateur at this.
      – Canara Robeco Emerging equities fund
      – BNP Paribas mid cap fund
      – Mirae asset emerging bluechip equity fund
      – UTI Mid cap fund
      – IDFC premier growth fund.

      2. I have a family broker who comes and dies all the work for us, how do i know if hes taking any amount from us as he doesnt take any money from me for any investment directly.
      So is purchasing these funds online a better way?

      1. All the funds you have mentioned are good.

        You can go with your broker if he is providing some real value to you, else you can do it online

  12. Nitin says:

    Hi Manish,

    I have invested in below MF (SIP) via fundslindia from past 3 years:

    1. Franklin India Blue-chip fund (Growth)
    2. HDFC Equity fund (Growth)
    3. SBI Emerging Business Fund-Reg (Growth)

    Gross Return for 3 year is around 27.95%. Though not sure about annual return (still calculating).

    My questions are:
    1. Is the selection of funds are good in terms of long term investment or should I replace these funds with some other better options. (Confused here)

    2. I would like to increase monthly invested amount, should I put in some fund or should I invest in another better funds.

    Actually, I wanted to know whether any other combination of MF (apart from one which I have chosen) would be a good pick in term of more returns in a future since it is for long term investment and if you pick less performing MF then return would be less in future.

    Eagerly waiting for your reply.

    Thanks!

    1. Nitin says:

      Hi Manish,

      Seeking for your suggestions on my above query?

      Thanks!

    2. Hi Nitin

      I think these funds are very good. You should continue with these

      1. Nitin says:

        Thanks Manish,

        One more question, I want to increase my SIP amount by 10000 monthly. I got a suggestion from my friend/agent to invest in some new funds instead of investing in existing fund in order to make more diversified portfolio. Below are the funds suggested:

        1. Franklin India High Growth Cos Fund(G)
        2. Franklin Build India Fund(G)
        3. HDFC Balanced Fund(G)

        As my understanding, that we should not invest in more than 2-3 funds,
        1) So is it advisable to invest in above new funds or investing in existing fund should be good for my portfolio?

        2) How is above suggested funds? Is it good to invest on them?

        Please advice!

        Thanks,
        Nitin

        1. Nitin says:

          Hi Manish,

          It would be great if you can share your views on my above query?

          Thanks!

          1. These seem to be sectoral or theme funds .

            I suggest look at diversified funds like L&T India Prudence or Franklin Prima Plus .

  13. Dev says:

    Hi Manish,

    I am investing for the first time in MF. I am 26 years old and want to invest lump sum amount in MFs. I can invest up to 6 lacs but confused which MFs I should invest in. After consulting my ICICI bank they suggested few ICICI prudential funds. I was still not sure as they did not suggest me any other plans apart from those which comes under ICICI prudential family.

    Can you please suggest in what MFs and what amount in each should I be investing. I was planning to invest in all three categories i.e. Large cap, Diversified and Mid Cap funds to make sure all eggs are not in one basket.

    What about ICICI prudential value discovery fund, ICICI prudential Blue chip fund? please suggest good options in each category.

    Eagerly waiting for reply.

    thanks,
    Dev

    1. ICICI Discovery and Blue chip are very good funds. Nothing wrong if you invest in just those two πŸ™‚

      You can also look at ICICI Balanced Advantage fund

    2. Also, incase you didnt knew , we also help our readers for MF investment, you can invest through us . We will do all the SIP setup and Mutual funds research for you and also help you in tracking and link it with your life goals

      1. angelo says:

        i would like to invest 3000 monthly kindly advise or mail to angelokevin@gmail.com

        1. Ok , I am asking my team to get in touch with you on this

          Manish

  14. Pugulu says:

    Hi Manish,

    My age is 28 and monthly income is 50k.
    I am new to MF investing and planning to buy two plans;
    A Short term- return oriented-medium risk plan and a Growth- Decent returns-Less riskier plan

    After some research I have finalized on two plans;
    1. Axis Long term equity- Direct
    2. Tata Balanced Funds
    I can invest upto 2-3k in each of the above plans in SIP.

    Are the above two good plans or you have anything better in mind?
    Since I am a novice, should I go for an advisor or buying directly AMCs would be okay?

    Thanks & regards,
    Pugulu

    1. I think you can buy them directly. They are good funds

  15. Milan says:

    Hi Manish,
    I have invested 50000 annual lumpsum in Kotak classic opportunities fund. Can you pls advise how it would perform in long term ?

    1. I think no one can tell about future

  16. raje says:

    Hello..

    I have around 4 lacs and I am planning to have them invested lumpsum and locked in for 5 yrs or above and hence interested to park it in MF.

    Please suggest what is a better fund to have purchased? Is HDFC\Birla Equity fund good? or invest in debt funds?
    Please advice.. Thanks..

    1. I would suggest a equity funds

      1. Raje says:

        Thanks.. It would be great if you can please advice on which would be a better fund we can invest on ?

        1. ICICI Balanced Advantage fund is a good one !

  17. Paresh says:

    Sir,

    Want some guidance from you, I just started mutual fund investment by monthly SIP of Rs.1000/- in SBI Blue Chip Fund DIRECT (G) for 20 yrs.. Now I want to invest in some other funds for next 10 to 20 years please guide me about my choice and suggest if any changes required.

    HDFC Balanced Fund Direct (G) : 1000/- per month
    HDFC Top 200 Fund Direct (G) : 1000/- per month
    Tata Balanced Fund Direct (G) : 1500/- per month
    Tata Ethical Fund Direct (G) : 1500/- per month
    SBI Magnum Mid Cap Fund Direct (G) : 1000/- per month
    SBI Magnum Global Fund Direct (G) : 1000/- per month
    ICICI Prudential Value Discovery Fund Direct (G) : 1000/- per month
    SBI Magnum Balanced Fund Direct (G) : 500/- per month

    Waiting for your reply, Thanks

    1. Paresh says:

      Dear Manish Sir,

      Waiting for your reply…..

      Thanks

      1. Paresh says:

        Manish Sir,

        Still waiting for your reply……………….

    2. These look fine to me . But I suggest just keep 2-3 fudns

      1. Paresh says:

        Thanks……….!

  18. Anilloka says:

    Hi Manish,

    I have 2 queries

    1. Selecting 4-5 mutual funds from same category is good practice or Different categories? I mean Do i need to select all 4 Mutual funds from Large Cap Equity Mutual Funds or Diversified Equity Mutual Funds or Hybrid( Balanced) Equity Funds? Can i pick 2 from Diversified or 2 from Balanced? I have done some research,from the last 5 yrs Diversified and Balanced funds are doing better than large cap funds. I’m ready bare some risk,

    2. Planning to SIP 3-4K every month? for this amount can i get tax exemption under 80C for the coming financial year? Or Only tax saving funds only eligible under 80C?

    Please suggest!

    1. Anilloka says:

      3. Also Selecting Mutual funds from same sector is good ? or Different sector?
      Like Selecting all from banking or 2 are from banking or 2 are from Different sector?
      Example 2 from HDFC/ICICI and 2 from franklin inida or Birla Sunlife?

    2. 4 is too much , Just pick 2 of them

      Only tax saving funds are eligible for exemptions

  19. Murali says:

    Hi Manish,

    I’m 28, can spare 10K per month due to my nature of job I am not able to monitor my funds closely (can try to monitor once per 2 months max)

    I have PPF and depositing as per the limit

    So Could you Kindly suggest some good Mutual funds for my retirement?

    1. Reliance Retirement fund is one option

  20. Prashant says:

    Hi Manish,

    I am a father of a 1 month boy and want to plan for his education from now itself, m planning to invest 2 to 3k every month for 18 years period. could you please suggest a good SIP plan for me.

    1. HDFC midcap opportunities are good one !

  21. kahnu says:

    Hi Manish,

    My port folio is

    Franklin India PRIMA PLUS GROWTH 2000 INR PM

    UTI OPPORTUNITIES FUND GROWTH 2000 INR PM

    ICICI PRUDENTIAL FOCUSED BLUECHIP EQUITY FUND – REGULAR PLAN – GROWTH 2000 INR PM

    Franklin India BLUECHIP FUND GROWTH 3000 INR PM

    HDFC TOP 200 FUND – GROWTH PLAN 6000 INR PM

    is it okay or I need to change any allocation.

    Thanks in advance
    Kahnu

      1. kahnu says:

        thanks so no need for any changes.

        Regards,
        Kahnu

  22. Paresh says:

    Dear Manish,

    Awaiting for your reply.

    Thanks

  23. Paresh says:

    Dear Manish,

    Awaiting for your reply

  24. Sibsankar Pahari says:

    I am 31 year old guy looking to invest my spare money .Due to my job constraints I can not keep a regular eye on the market.
    By reading multiple articles on your site I think the best option for me is to do SIP in some Mutual Fund.
    Can you suggest me some strategy or some good mutual funds where I can invest.

    Thanks in advance

    1. Hi Sibsankar

      You just need to pick few good funds and thats all . After you invest sit tight πŸ™‚ . ICICI Balanaced Advantage is a good fund to start with !

  25. Paresh says:

    Dear Manish,

    I just started to invest in SBI Blue Chip Direct Growth with SIP of 1000/- per month. Want to know that Investment in Same Fund house with multiple funds is good or investment with multiple Fund house is better? and also want to know your view on SBI Mutual Fund House.

    Thanks

    1. You can never judge a fund because its fund house is good or bad. SBI blue chip fund is good enough , so you can continue with it . Its not because SBI as a fund house is good or bad. Every fund house will have good and bad funds.

      Manish

      1. Paresh says:

        Thanks a lot Manish!!!!!!!!!

  26. mohsinKHAN says:

    Feedback
    it is humble request to all AMC and all online investment platforms brokers and sub brokers
    please send yearly one statement on paper at address registered with you
    because we are mostly invest online if suddenly something happened to us accidentally then family members don’t know about our online investment and you send statements on e-mail id it is have password how family members know how many amount in how many folios we have ?
    Because all AMC do not have their offices in every city’s of Maharashtra or other state in India
    if i accidentally death where to go my family members and nominated person to transferred all fund or redeem all fund on his/her name
    Request to you please send one yearly hard copy of all investment online or offline PAN number base send on registered address most important which contains how to nominee redeem or transferred all investment on nominated person and clear maintains all processes all forms all documents details to help nominated person or families
    Because nominee or families do not worried about what to do ????

    1. Hi mohsinKHAN

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

      1. mohsinKHAN says:

        thanks

  27. Abhishek says:

    Hey Manish,
    Thanks for sharing such useful articles.I am 22 year old guy looking to invest my spare money .Due to my job constraints I can not keep a regular eye on the market.
    By reading multiple articles on your site I think the best option for me is to do SIP in some Mutual Fund.
    Can you suggest me some strategy or some good mutual funds where I can invest.

    Thanks in advance

    1. Abhishek

      A good fund to start is ICICI Balanced , which is a equity fund , so make sure you are ok with volatility !

  28. Indrajit Ghosh says:

    Hi Manish Sir,

    I have been investing in
    1. ICICI Focussed Bluechip – 5000/month
    2. Quantum Long Term Equity – 5000/month
    3. Birla Sun Life Pure Value Fund -5000/month
    4. Axis Long Term Equity- 25000/year,
    through SIP from last one year. Should i continue with the fund or should i make some change?

    1. Hi Indrajit

      THis question is a right fit for our forum https://www.jagoinvestor.com/forum

  29. hitesh says:

    Sir,
    OBJECTIVE: in 10-12 yr accumulating 1 crore rs.
    Present age:29 married.
    monthly saving 80K, own house and no other liabilities.
    I have started 2 MF of 3000 rs per month through SIP each and SACH MAN GOLD EFT 1 unit per month.
    1. HDFC Balanced Fund-Growth
    2. ICICI Pru BLUE CHIP FOCUSED – Growth

    Apart from SIP i do purchase units at regular interval approx. 5k every 3 monthly.

    please suggest are these mf and gold etf is good enough to give 12% min return, also suggest how much more and where to invest in order to achiev my goal.

    Regards,
    hitesh

    1. Hi Hitesh

      This is more thank a normal question, it needs analysis . Please put your query on our Q&A forum – https://www.jagoinvestor.com/forum

  30. Nikhil says:

    Hi Manish,

    I have been a great fan of your website and have taken your advice on several occasions. Need your help once again. Others are also welcome to comment.

    I am planning for my retirement at 55 and am 31 right now. Could you please review my MF portfolio for me please.

    Goal for retirement: 3 crores
    Current investment:
    Hdfc mid cap- 1.1 lac
    Icici focused blue chip- 60 k
    Axis long term- 1lac
    Quantum long term- 74k

    All of these are lump sum investments and I have picked the lows in the market to invest in it in the last 2 years. I can also look at another 10k per month for the sip but need your suggestion if I should go 25% on each of these ??

    Thanks
    Nikhil

    1. Before that, do you know how much interest you need to generate to reach 3 crores with that kind of investments ?

  31. AJ says:

    Yet again a great topic Manish. If it was not for you guys from JagoInvestor I would have been strolling in the dark today.

    To sum up the points I would shrink it to just two words – Fiduciary responsibility !

    Does the fund house consider itself a fiduciary? If it does then it will automatically possess all the three qualities mentioned above. Especially because Mutual Fund business is Zero Risk to the AMC and 100% risk to their Investors.

    Like lot of the people here I find Quantum AMC possessing top Fiduciary qualities. Some fund houses like HDFC also display good characteristics. In the US market John Bogle and his Vanguard fund embodies the true sense of Fiduciary function.

    1. Thanks for sharing your detailed views on this topic.

  32. Hem says:

    Just clearing all the backlogs of all your posts.

    Recently when I submitted SIP renewal to CAMS, some distributor code was written on it. I’m not sure who did it, CAMS or the fund house? I threatened them that I would complain to SEBI. It was later cleared. I always write “DIRECT”, I missed on it somehow on this occasion.

    1. Thanks for sharing that. Most of the people do not add DIRECT word and insider people might write the code there !

  33. aatmaram says:

    Dear Manish ji,
    Is it my post is reaching to you,
    Await to hear from you
    the current market as it peak (bullish)level, & as per expert says at this time we think of sell the stock to make good profit, anyhow it is tedency that at market down wards one should grab the stock & sell it at peak times.
    it is ok for stocks.
    my querry is
    is it same funda works on Mutual funds means if a new invester wants to enter into MF is it right time for him because if he invest at this time then he hav to wait & watch for time when call more better than this to exit if not he may get nothing. and if this is right then he go by SIP method is it same impact ?
    pls give clarity of what is right time to enter for new entrant Or he has to wait for how much period if not he can go SIP method to step into mf.

    1. Obviously a lot of upmove was lost because one did not enter long back . So one can wait. . but if you are investing for long term , its better to start your SIP right away !

  34. Navin says:

    I like HDFC and franklin for the transparency and the consistency of performance. I hate reliance for eg. in reliance you can start a SIP online but to stop it you have to physically visit the branch and submit a written application(by post also works but still a pain ) to close the SIP. I don’t think this is fair.

    1. Yes. this is a structure created by them to make sure SIP’s are not stopped !

      1. James Dominic says:

        When we create SIP online we have also to authorise the bank to honour the SIP by means of a unique ID generated at the time of creating SIP. A simple solution is to go to your bank account online and discontinue / stop SIP payment on that unique ID.

        1. Thanks for sharing that !

  35. Version says:

    Hmmm….although I have Franklin, DSP BR, and HDFC funds in my portfolio, but I never had a look at any of the Quantum funds. Thanks to this article and the discussion that followed, I will analyze funds Quantum fund house offers and would possible add one/two funds to the portfolio.

    1. They are very good πŸ™‚

      1. Kuntal says:

        An american study on mutual funds by morningstar, conducted over a long time, revealed a very interesting fact. It showed (retrospectively) that the best predictive indicator that a fund will do well in future is not past performance; rather it is expense ratio. Lower the expense ratio of a fund- the more likely it is to perform well in future. Surprising, isnt it?
        Thanks,
        Kuntal.

        1. Thanks for sharing that Kuntal , can you share the link with us ?

          1. Chetan Ambi says:

            Manish, U can have look at below links and yes it’s surprising that studies revealed that lower expense of a fund is more likely to preform well in future. I think you can make an article out of this πŸ™‚

            https://personal.vanguard.com/pdf/morningstar.pdf

            https://bucks.blogs.nytimes.com/2010/08/11/fund-expenses-more-important-than-five-star-status/?_r=0

            https://www.thinkadvisor.com/2010/08/09/morningstar-study-says-high-fees-are-bad-for-inves

            1. Thanks for the links . Will check them and do some post on those lines !

            2. Chetan Ambi says:

              Thank you Manish. I will be waiting for the article !!

            3. Sure .. why dont you yourself give it a try ? You seem to already have learned a lot on this topic ? Guest post ?

  36. R Choksi says:

    I feel that though the above points are important to be considered, other points such as consistent outperformance over a longer period is one of the important criteria. If the fund manager is serious only then you will see a continuing outperformace in the scheme and this is despite the company having varied interests other than asset management. e.g. ICICI Focused Blue Chip is a good scheme inspite of ICICI being into other areas such as banking.

    Yes, I find Quantum to be a good fund house.

    1. Kuntal says:

      Another point which I missed- Fund management team should be stable, not changing frequently, not dependent on star manager. Eg Franklin, Quantum.
      ICICI Focused Blue Chip has already changed its manager. Also this fund debuted in 2008, so it could buy stocks during NFO at throwaway prices.
      It remains to be seen how this fund fares in long term in a more level playing field.

    2. Thanks for sharing that πŸ™‚

  37. Kuntal says:

    In my humble opinion, investor should first select AMC, then fund. Choose fund houses with 1.low turnover 2.low cost 3.investor friendly 4.sticks to its style 5.has asset management as only business (not side business).
    Among large fund houses Franklin fits the bill (maybe even HDFC and DSP).
    Among small fund houses Quantum fits the bill (also PPFAS, if they stick to their
    PMS principles).

    1. Thanks for sharing your views on this

  38. Ram says:

    HI Manish,

    One of the rare articles that I didn’t find useful. You’re asking a lot of questions, but have not given any solid examples on each of the categories. As you know, any education will stay better with readers and is possible to implement if you give practical examples

    Ram

    1. I knew that Ram. the article was written with a bit of urgency .. Will take care of this from next time . Thanks for sharing your feedback !

  39. George Joseph says:

    One parameter i started looking for in a fund is the expense ration. The expense ration is significantly low for PPFAS and Quantum fund, which has a direct correlation with the quality of the fund i feel.

  40. S.Sivaram says:

    I dont have much knowledge about this but I would rather say Firmly at present Franklin Templeton Fund House is the best in all aspects

    Can you advise me on how Quantam Mutual Fund House in these aspects ?

    1. I find Quantum very authentic and one of the best fund houses . THey are small, but are going in correct direction !

      1. dinesh jain says:

        Also QUANTUM is the first direct to investor mutual funds of india since 2006.

        Hats off to Ajit Dayal (promoter of quantum mutual fund) for taking such a courageous approach of not giving commision to distributor and approaching the distributor directly that also in 2006.

        1. Yea .. even PPFAS has come up with courageous changes

  41. Vikas Bargale says:

    Hi,
    Nice small and tidy article.
    As per your criteria, I think only two fund house, pass the test.

    Quantum MF and PPFAS MF.

    Just my personal opinion.

    Regards,
    Vikas

    1. Ravi Gupta says:

      I agree with Vikas,

      Only two PMS companies (not schemes) have outperformed their benchmarks in all the three periods. These are: Quantum Advisors and Parag Parikh Financial Advisory Services.

      You can read more about in the below link .
      https://amc.ppfas.com/media/news/pms-performance-the-good-the-av.php#.UkJzSj-I9KZ

    2. Yes, but only if get very very strict πŸ™‚ . However I think even franklin , DSP , HDFC are some good fund houses !

      1. dinesh jain says:

        I agree with Manish

      2. Mohana Ganesh says:

        HDFC as you said is a good fund house. But off late two of their best funds – HDFC Top 200 and HDFC Equity – performance has been dismal. What should one do with these funds – hold or sell?

          1. Mohana Ganesh says:

            Thank you Manish.

      3. Sameer says:

        Agree HDFC, Franklin, DSP are good. Opinion on IDFC?

        1. IDFC is another good one ! , atleast better than many others

  42. Manish why is it important to focus on a fund house at all?
    Why not do the picking the other way round?
    First decide what sort of returns you want,in what time frame,the volatility you can stomach and the permanent loss of capital you can live with along with the liquidity and income you need in between.This should determine the category of mfs a person should invest in.
    Then it is simply a matter of finding the best rated funds of that category and looking up their history to check consistency,variation in returns and volatility.
    Then we could take a look at the securities the short-listed funds own and the expenses of the fund and decide.
    There may be 40 fund houses,but there are not even a dozen funds worth investing in over the long term,so why bother about studying the lot of funds in the market?

    1. Agree to that point that investors have to do their planning on risk appetite and goals . Now its your belief if you want to choose funds out of filtered list of fund houses or just want to look at Funds directly .

  43. Hi, Manish
    Here i would like to share one experience with investor who told me that i will choose that AMC which have only focus on one business like “Asset management” or “Mutual fund business” only, no other business should associates with this group. Really i appreciate him and i also add this parameter while choosing AMC and giving advise to any investor.

    1. Thansk for sharing that

  44. Abhishek says:

    Hi Manish,

    The parameters can be evaluated better if you are a distributor of the fund house compared to a Financial Planner, who just recommends funds.

    Rgds
    Abhishek

    1. dinesh jain says:

      Hi Manish,

      Thank You for penning down my thoughts for the benefit of readers.

      I agree with abhishek that a distributor will be in a much better position than a financial planner/common investor when it comes to filtering of the fund house on the basis of above parameters.

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