The mutual fund industry has 38 fund categories with more than 1,000 schemes. Within each category, there are funds which are run with different style and mandates. Thus, shortlisting funds can be overwhelming. Typically, many investors tend to follow the herd when it comes to choosing funds.
We all know that asset allocation is the building block of efficient investment portfolios but fund selection can add significant alpha to the portfolio.
Often, historical performance is the most common method for fund evaluation. Looking at the performance tells you something, but it doesn’t tell you a lot of things unless you dig deeper to understand the drivers of that performance.
Morningstar has released a report that gives a detailed step-by-step process on the different parameters fund analysts and advisers should use while analysing funds.
This report contains:
- Multi-factor Analysis and Attribution
- Portfolio Construct and Diversification
- Qualitative Screening of Manager Attributes
- Peer Comparisons and Scorecard
- Factor Investing
- Risk Metrics and more
Download our Guide to Fund Selection Report to understand how to pick funds smartly.
