ASK Wealth Advisors

Mutual Funds form an integral part of every client's investment portfolio on both the debt and the equity side. Mutual fund investments enjoy certain distinct advantages; diversification of assets, professional expertise, liquidity, low cost through economies of scale, safety and transparency.

Having said that, it is important to seek the help of a financial advisor who can assist you in making the right choice of mutual funds at an acceptable level of risk that help you meet your life goals. The advisor will ensure that you remain true to your asset allocation at all times through proper rebalancing and readjustments to your portfolio.

At ASK Wealth Advisors we classify and recommend mutual funds across the following categories:

ASK Wealth Advisors key differentiation

Fund managers characteristics (stated below) are given a higher allocation than just the fund's performance based quantitative statistics

Fund Management experience
Fund Manager's Knowledge&
Fund Manager's Temperament

Robust methodology for Forecasting risk adjusted returns over the long term

For Example: Two funds with the same PE ratio but with different growth rates would be rated differently.

Scheme A, with a Portfolio growth rate of 30%, and a PE of 12 and
Scheme B, with a Portfolio growth rate of 20%, and a PE of 12

All other factors remaining constant, Scheme A with a higher growth rate and therefore better future performance would be recommended

High relative & consistent returns over a period of time

For Example: In a scenario with two funds Fund A and Fund B having different volatility delivering similar turns. The fund, which is more consistent and still delivers superior returns, would be recommended (in this case Fund A)

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Our research methodology

The graph below depicts our approach to recommending mutual funds:

We follow a proprietary mutual fund rating methodology, validated by CRISIL, before giving our recommendations on any MF. Our methodology consists of a detailed Quantitative and Qualitative analysis to rank funds in their respective peer set. The scope of analysis includes:

The Fund Houses
The Mutual Fund Scheme – Quantitative analysis
The Fund Manager – Qualitative analysis
After this, an overlay of forward valuation of the fund & estimation of future growth potential is undertaken, for recommending funds.

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EVALUATION OF FUND HOUSES

These parameters are non quantifiable and hence are covered in detail in the due diligence form. The Parameters covered are as under:

Holding pattern in the AMC
Details of the fund management & research team
Risk management processes followed by fund houses
Details of investment process followed by the fund management team, etc

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Evaluation of Mutual Fund Scheme

Quantitative Analysis
Evaluation Parameter	Benefits
Investment Objective being followed	Manage expectation on risk & return
Superior Risk Adjusted Returns	Funds delivering consistent returns are identified, returns analyzed commensurate level of risk since pure performance misleading
Sector Over exposure in the Portfolio	Risk in the portfolio is reduced by a diversified portfolio investment in the right sectors
Funds invested towards the key emerging sectors	Ensure out performance of the portfolio
Liquidity of stocks in the portfolio	Ability to absorb redemption pressures are analysed
Assets under Management (for mid/ small cap oriented funds)	Unable to manage large portfolio or investment options not being available
Tracking Error (for index funds)	Methodology to check that the index funds' objective is being met
Valuation of funds and their forward earning Potential	Expected future returns projected
Stock Diversification in the Portfolio	For higher incremental returns to the customer

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Fund Manager Evaluation

Qualitative Analysis
Evaluation Parameter	Benefits
Fund Managers Qualification / Experience	Evaluate the fund manager's ability to understand the nuances of the market and avoid its traps
Investment style & risk taking propensity of the fund manager	Temperament analyzed, for delivering consistent returns.
Churning of stocks in the portfolio	Shows a lack of conviction in the stocks picking ability of the fund manager
Returns delivered by fund manager in the bull & bear market	Superior returns across market cycles and hence would be in a position to tackle

Other Performance Indicators:

Other factors which are taken into account while evaluating the funds are:

The beta of the fund
The alpha
The Sharpe ratio
The maximum drawn down

These are generally stated in the Fund fact sheets.

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Model Portfolio

This forms a part of the ASK’s Wealth Management service. It is a concentrated portfolio of mutual funds across equity and debt. It is customized keeping in mind your risk profile and the time horizon for which you would want to stay invested in the portfolio. It is suited to meet various investment objectives.

Benefits of having ASK as your Mutual Fund Advisor:

Client has access to analysis on wide range of mutual funds floated by all AMCs in the market, both on the debt and equity side
Continuous tracking of mutual fund portfolio performance which helps in weeding out underperforming funds and also spotting opportunities to enter good funds
Portfolio trigger and alerts generation ensures asset allocation is maintained through periodical rebalancing of portfolio
Quarterly updates on portfolio and fund performances to keep a check of where your investments stand

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