Should you consider Fundsindia ratings in Mutual Funds Selection?

Should you consider Fundsindia ratings in mutual fundsShould you consider Fundsindia ratings in Mutual Funds Selection?


Last week, Fundsindia has launched in house rating service for mutual fund schemes. Srikant Meenakshi, CEO of Fundsindia indicated that such mutual fund ratings are not influenced by commissions paid by asset management companies to them. How Fundsindia is rating mutual fund schemes? What are the key parameters they are considering in rating mutual fund schemes? What an investor should know about mutual fund ratings by Fundsindia so that you are not biased towards specific mutual fund schemes recommended by them?

Also Read: How to invest in mutual Fund Schemes for Child Education?

About Fundsindia Mutual Funds Platform


If you are already aware of Fundsindia, you can skip this section. Fundsindia is the first online portal in India which offers mutual funds investment with zero transaction charges. They would get trial fees directly from mutual fund asset management companies, hence they are able to offer such services with zero transaction fees.  Apart from this, they also offer services for demat account for equity investment, financial advisory services etc.,

Currently, who are rating mutual fund schemes in India now?


Currently few of the players like Crisil, Valueresearchonline and morning star are rating mutual fund schemes based on various parameters.  Fundsindia has joined this bandwagon of rating the mutual fund schemes now.

How do Fundsindia rate mutual fund schemes?


Funds India rates, mutual fund schemes on a scale of 1 to 5 stars. 5 stars means best mutual fund in the category and 1 star refers worst mutual fund in the category.

What parameters Fundsindia is considering in rating Mutual Fund Schemes?


Here are some of the key parameters Fundsindia is considering in rating mutual fund schemes.

Consistent 1 year returns rolled daily for 3 years.

Consistent 3 year returns rolled daily for 5 years.

These returns are compared with category average and the benchmark index.

These returns are compared with risk and volatility measures like Sharpe Ratio, Sortino Ratio and Standard Deviation of returns.

Fundsindia believes that long term performance and consistency is key so that we can avoid returns on short term movements.

FundsIndia Vs Crisil Vs Value Research Online Mutual Fund Ratings


FundsIndia rates mutual fund schemes from 5 star (Good mutual fund scheme) to 1 star (worst mutual fund scheme). If you want to invest in top mutual funds rated by Fundindia, consider 5 star and 4 start rated mutual fund schemes.

Crisil rates mutual fund schemes from Rank-1(Good mutual fund scheme) to Rank-5 (worst mutual fund scheme). If you want to invest in top mutual funds rated by Crisil, consider Rank-1 and Rank-2 rated mutual fund schemes.

ValueresearchOnline too rates mutual fund schemes from 5 star (Good mutual fund scheme) to 1 star (worst mutual fund scheme). If you want to invest in top mutual funds rated by VRO, consider 5 star and 4 start rated mutual fund schemes.

Top Mutual Fund schemes recommended by Fundsindia with 5-Star


Now, let us review some of the top mutual fund schemes which Fundsindia has recommended as 5-Star in large cap and mid-cap/small cap segment.

Birla SL Frontline equity fund

Kotak Select focus fund

Franklin India Prima Plus fund

Mirae Emerging equity funds

Franklin India high growth cos fund

Franklin India Smaller cos fund

HDFC Midcap Opps fund

What you have observed above? Most of them are already recommended by me in my top mutual funds lists.

Does Fundsindia rating of mutual fund would have negative impact on company?


Funds India indicates that maintaining a mutual fund scheme rating is a challenge. Many mutual fund asset management companies are already asking why they are not including their funds in such top mutual fund schemes list. Now maintaining ratings for a mutual fund would be even more tough.

But I don’t see any negative impact on the company as it would still strengthen the investor bonding.

Does selection of funds by FundsIndia would be influenced by commissions?


Currently Fundsindia is in mutual fund distribution platform and recommending several top mutual funds. They get commissions on mutual fund schemes invested by investors and such commissions are not uniform.

Fundsindia has just started rating mutual fund schemes now. We as an investor do not know how much commission Fundsindia would get from mutual fund asset management companies. Hence it is difficult to comment whether ratings would get influenced with such commissions.

Also Read: Best Midcap mutual funds to invest in 2017

Should you consider Fundsindia ratings in Mutual Funds Selection?


If you observe, when I pick top mutual fund schemes, I would consider most of these parameters anyway. My advice is not just get biased with Fundsindia rating alone. Consider Crisil rating, value research online ratings, consistent performance in last 5-10 years as additional parameter along with FundsIndia mutual fund ratings and invest in the top mutual fund schemes.

If you enjoyed this article, share it with your friends and colleagues through Face book and Twitter.

Suresh

Should you consider Fundsindia ratings in Mutual Funds Selection

6 comments

  • Kalingarajan

    Dear Suresh

    Thanks for your tips,

    Which client is the best portpolio client for invest mutual funds(free or paid)

    Where can i approch.

     

    • It depends. If you can make your own research and invest in mutual funds, you can invest in mutual funds through direct mode or any mutual fund portal. If you cannot make your own decisions, you can invest mutual fund online portals like Fundsindia, ICICIdirect or investfunds.com etc., They would provide research and advice on specific mutual funds. However you should be careful that they are not biased towards any fund where they might get higher commissions.

  • Pravin

    Excellent funds recommended.

    Tks a lot.

    Keep doing good work for we people.

    Regards

    Pravin

  • Rohit Chaudhari

    Please suggest the best website to track MF portfolio.

  • yogesh

    Which forum is best ( Moneycontrol or value reasearch ) ? I  have observed  they give different rating & place same fund in different category (Large cap ,Multicap,Mid or small cap) 

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