|
|
 |
| We follow a well defined methodology for rating returns, risks and the fundamentals in which underlying philosophy of typical investment banking works. For a quick understanding we have provided a sample rating. Detailed rating can be downloaded in PDF format. |
|
|
 |
Mutual Funds |
| |
|
In these times of financial market turmoil and volatility, it has become even more difficult to build, manage and monitor mutual fund investment portfolios. The question then arises as to how to recommend the most appropriate mutual fund schemes which suit the individual risk profile and investment objectives of the investors? This is a dilemma which all financial advisors face. All is fine when the markets are on the roll, but when there is a marked downside and volatility, then there is a crisis. The investor is in a state of disbelief and the advisor has no answers and more often than not starts avoiding the investor.
If there had been some strong investment logic behind building and managing the mutual fund portfolio, then all the stakeholders: the investor and the advisor would be in a much better frame of mind when markets decline. Their ability to face and weather the downside is much better since there is a strong logic based upon which the portfolio has been built. There is good probability that these portfolios will outperform the benchmarks. It is precisely with this as an objective that WealthERP has designed proprietary rating models for different categories of mutual funds for the adviser community. Most advisers do not have the time, skills and the where with all for building these analytics on their own. Hence, WealthERP has taken the responsibility to provide investment advisers of all sizes with process driven portfolio analytics. |
| |
|
|
| |
|
Rating Philosophy: |
| |
|
WealthERP’s philosophy is to select the best performing mutual fund schemes based upon alternative sets of multiple parameters which are most appropriate for varying risk profiles of investors. We strive to identify schemes which satisfy several criteria and benchmarks in order to ensure to the extent possible that they continue to perform well in future. |
| |
|
|
| |
|
Methodology: |
| |
|
WealthERP’s proprietary Multi Parameter Weighted Rank Score (MPWRS) Model has 19 parameters grouped as given below: |
| |
|
|
| |
|
Returns: |
| |
|
1 month, 6 months, 1 year, 3 years, 5 years, and expense ratio. |
| |
|
|
| |
|
Risk: |
| |
|
Standard deviation, Sharpe. Beta, Alpha and worst three months. |
| |
|
|
| |
|
Fundamentals: |
| |
|
Launch date, assets under management, and tenure of fund manager. |
| |
|
|
| |
|
Portfolio: |
| |
|
Investment style, P/E, P/B, market capitalization and concentration of top 5 holdings. |
| |
|
Weights have been assigned to each of the above parameters. The weights are dependent upon the risk profiles: conservative, moderate and aggressive. For example, conservative investors will have lower weights for short term returns but will have higher weights for long term returns and vice versa. Similarly for risk parameters, conservative investors will have higher weights and vice versa.
Then each of the parameters are ranked across all the schemes. Thereafter the weights are multiplied by the ranks and these are aggregated for each scheme. Finally these weights*rank aggregates are ranked and schemes are sorted in ascending order to arrive at the best schemes. |
| |
|
|
| |
|
TOP 40 EQUITY MUTUAL FUNDS: COMPOSITE, February 2009 |
| |
|
|
| |
|
S.
No. |
Fund Name |
1-Month Return (%) |
1-Year Return (%) |
3-Year Return (%) |
Cap |
Assets (Rs Cr) |
Top 5 Holdings (%) |
Standard Deviation |
Sharpe Ratio |
1 |
UTI Dividend Yield |
-0.21 |
-35.88 |
1.19 |
L |
869.11 |
20.46 |
28.90 |
0.02 |
2 |
Reliance Banking Retail |
-7.90 |
-45.46 |
2.35 |
L |
669.95 |
51.93 |
33.03 |
0.09 |
3 |
ICICI Prudential Dynamic |
-2.08 |
-41.27 |
0.28 |
L |
1047.37 |
25.87 |
29.95 |
-0.01 |
4 |
UTI Mastershare |
-0.37 |
-44.84 |
-2.50 |
L |
1242.07 |
24.33 |
29.70 |
-0.11 |
5 |
DSPBR Equity |
-1.19 |
-41.12 |
2.90 |
L |
851.85 |
23.26 |
30.57 |
0.07 |
|
| |
|
|
|
|
|
|
All assets 
