Our fund selection follows a documented, step‑by‑step process. No scheme is included in the recommended list without meeting all key criteria.
Identify Category
Align client goals and investment horizon with suitable mutual fund categories such as Large Cap, Mid Cap, Hybrid, or Debt.
AMC Screening
Evaluate AMC reputation, size, governance standards, and the stability of fund management teams.
Performance Analysis
Compare rolling returns against relevant benchmarks and peers across multiple periods such as 1, 3, and 5 years.
Risk‑Adjusted Returns
Review measures such as Sharpe Ratio, Sortino Ratio, and Standard Deviation to balance risk with reward.
Expense Ratio Check
Prefer schemes with competitive expense ratios to support better long‑term wealth creation for investors.
Fund Manager Review
Assess the fund manager’s experience, track record, and consistency in investment style.
Portfolio Quality
Check diversification, sector and stock concentrations, and in debt funds, maintain a high credit quality bias.
Riskometer Mapping
Match the scheme’s Riskometer level (Low to Very High) with the client’s documented risk profile.
Internal Review
Conduct an internal review before including or retaining schemes on the recommended list.
Periodic Review
Review recommended schemes at least annually, and more frequently if there are major market or scheme‑specific developments.
Recommendations are made within the broad suitability bands below, considering risk profile and investment horizon.
| Risk Profile | Short Term (<3 Years) | Medium Term (3–7 Years) | Long Term (>7 Years) |
|---|---|---|---|
| Very Conservative | Overnight, Liquid; high quality Debt up to 100%. | Ultra Short Duration, low‑volatility Debt; minimal equity exposure. | Short Duration, Banking & PSU Debt; focus on capital preservation. |
| Conservative | Liquid, Arbitrage; Debt‑oriented products 90%+. | Conservative Hybrid; Equity generally up to 25%. | Large Cap equity allocation in a limited range; balanced approach. |
| Moderate | Conservative Hybrid with limited equity. | Balanced Hybrid, Large / Flexi Cap equity 35–50%. | Flexi Cap, Large & Mid Cap equity 50–65%. |
| Moderately Aggressive | Aggressive Hybrid; equity 25–40%. | Focused / Flexi Cap equity 50–70%. | Mid Cap, Value / Contra, Tax‑saving equity 65–80%. |
| Aggressive | Dynamic Asset Allocation with equity tilt. | Mid / Small Cap, certain Sectoral themes 65–85% equity. | Small Cap and high‑risk Sectoral / Thematic equity 80–100%. |
| Very Aggressive | Focused Equity strategies. | Small Cap, International or thematic allocations. | Concentrated, high‑volatility strategies suitable only for investors accepting very high risk. |
The following situations generally lead to exclusion from our recommended list:
Asset Management Companies facing serious regulatory action or governance concerns.
Debt schemes with material exposure to low credit quality papers beyond internal comfort levels.
Schemes showing excessive concentration in a few stocks or sectors relative to category peers.
Frequent fund manager changes over a short period without clear justification.
Unsuitability: If an investor chooses to go beyond the suggested risk limit or suitability band, we may seek a written confirmation that they are proceeding against our suitability assessment.
Conflict of Interest:
- Recommendations are not made solely on the basis of commission structures from AMCs.
- Poonam Investment does not have any proprietary products; we distribute third‑party mutual funds only.
- Our selection process and rationale are documented and can be produced in case of audits or regulatory reviews.