Along with evaluating the mutual fund performance, there are several qualitative criteria behind the selection of a fund house. Use the 4 Ps model of selecting a good fund house – people, philosophy, process and performance
Ask these key questions when assessing an AMC (Asset Management Company)
1) People – What is the background? What is the experience?
This includes the fund management team’s credentials. You need to evaluate their experience, their academic and professional background
2) Philosophy - Is there a clearly defined investment philosophy across all market situations or is this a ride-the-wave, “bull-market” manager? You need to understand whether the fund manager stays true to the investment mandate and does not blindly follow the market movements.
3) Process - What is the research and investment process and how reliable is it? Is the research done in-house. What is the portfolio construction process?
4) Performance – This is the final parameter to evaluate. Assess the consistency of the performance across all market cycles.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
www.Quantumamc.com