A structured, documented and repeatable process for selecting mutual fund and SIF schemes for client recommendations — covering category identification, AMC screening, performance, risk and approval.
10-Step Scheme Selection Process
- Identify client risk profile — use the RPQ score, risk category and time horizon to set eligible categories.
- Identify suitable MF/SIF category — map risk + horizon to the Suitability Matrix.
- Screen AMCs — reputation, AUM, regulatory track record, fund-manager stability.
- Analyse performance — rolling 1/3/5-year returns vs benchmark and category; favour 3+ year consistency.
- Evaluate risk-adjusted returns — Sharpe, Sortino, Std Dev, Max Drawdown.
- Compare Base Expense Ratio (BER) — prefer lower BER when performance is comparable (always BER, never "TER").
- Assess fund manager — tenure (2 yrs+ preferred), track record, style consistency.
- Evaluate portfolio quality — concentration, credit quality, duration; avoid over-concentrated portfolios.
- Map to SEBI Riskometer — scheme Riskometer must not exceed the investor's declared tolerance.
- Approval — Partner (Hardik Joshi) approves inclusion in the Approved Scheme List.
Approved List & Portfolio Review
Full review of the Approved List every 12 months (interim on major events). Schemes are removed on 4 consecutive quarters of underperformance, fund-manager change, or regulatory action; affected investors are informed with switch options. Only schemes on the Approved List may be recommended to advisory clients. All analysis is retained for 5 years.
| Review | Frequency | Action |
|---|---|---|
| Annual Portfolio Review | Every 12 months | Rebalance if drift > 10%; switch underperformers; re-profile on life events. |
| Semi-Annual Check | Every 6 months | SIP status, performance vs category, scheme alerts. |
| Ad-hoc Review | On market event / request | Impact assessment; adjust with client consent. |
| New Investment Review | Before every new investment | Confirm scheme on Approved List, Riskometer and suitability. |