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Financial Planning I select funds based on…

I select funds based on…

Learn from top advisors as they discuss their fund selection strategy.
R Daya Feb 13, 2017

Fund selection is one of the most important responsibilities of a financial advisor. While each one has their own unique fund selection strategy, read on to see how these leading fund advisors go about it.

Ramesh Bhat, Aniram, Chennai

The most important thing to me while choosing a fund is the performance of the fund. I first evaluate the returns brought in by the fund, the performance of the fund in bearish and bullish markets and the returns it has given in the past.

The next important thing is the fund manager. If he is a star fund manager with a good track-record, then I am sure that the fund is safe. After all when markets are volatile, what we need is a seasoned fund manager, who can mitigate the risks of the market volatility.

I also look at the quality of portfolio of the fund. In my view, the investments made by the fund should make sense in the prevailing markets.

Kavitha Menon, KM Advisors, Mumbai

I prefer to look at qualitative aspects like the fund manager’s history with the fund house, the schemes he has managed in the past, the kind of stocks the fund is holding etc. I believe that this reflects how the fund will work for my client in future.

Another thing that I consider is quality of portfolio. Since I understand stocks, I look at the selection process and the thinking of the fund manager.

In the case of bond funds, I look at prevailing market conditions, interest rate cycle, duration and yield to maturity.

I am very old school when it comes to comparing funds, as I prefer downloading the portfolio and analysing it personally.

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