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What is FundSelect Plus?
Personalfn's endeavour to help the mutual fund investor achieve his financial goals continues.
FundSelect Plus, our premium mutual fund offering is proof of that. By subscribing to this service you can access 6 mutual fund portfolios (3 each for equity and debt funds). The portfolios have been developed by Personalfn's Research Team. Our mutual fund research initiative, which kicked off 10 years ago, has a credible track record in identifying mutual fund schemes best suited for investors.
The model portfolios recommended by FundSelect Plus are in effect an investment strategy for investors with varying risk appetites and investment time frames. Our expertise in building portfolios is backed by our view on equity and debt markets, that reaches out to our investors every month through an 'Investment Ideas' note.
In addition to the equity and debt portfolios, we have a note on the best tax-saving funds (also known as equity linked saving schemes - ELSS) that in our view must form part of your portfolio. At present we have a detailed note on the funds; at a later date we plan to have a distinct tax-saving fund portfolio like we have for equity funds and debt funds.
There are 3 model portfolios under FundSelect Plus for equity fund investors. These portfolios have been devised based on the investor's risk appetite.
The equity fund portfolios are:
1. Aggressive Portfolio for the investor with high risk appetite
2. Moderate Portfolio for the investor with medium risk appetite
3. Conservative Portfolio for investor with conservative risk appetite
Unlike the equity portfolios, which have been categorised based on the investor's risk profile, debt portfolios for FundSelect Plus have been formulated using the investment tenure as the cornerstone. In the debt funds category, we have three portfolios, with investment tenures of:
1. Less than 3 months
2. 3 - 12 months
3. More than 12 months
Sample Screens: Portfolio | Equity Portfolios | Debt Portfolios
What does FundSelect Plus offer?
| Service |
Description |
Frequency |
| Access to six model portfolios |
Three portfolios for equity funds
Three portfolios for debt funds |
Reviewed monthly. Review includes detailed notes. |
| Access to the best tax-saving funds |
A detailed note on the best tax-saving funds. We have also short-listed tax-saving funds to watch out for in the future. |
The note will be revised if there is a change in our view. |
FundSelect
view sample |
Detailed research reports on leading mutual fund schemes. Report available online and in PDF format.
Exclusive to our clients and subscribers. |
Weekly |
Investment Ideas
view sample |
A view on equity and debt markets followed by an idea most suited for the prevailing investment scenario.
Exclusive to our clients and subscribers. |
Monthly |
New Fund Offers
view sample |
Research on leading New Fund Offers
Exclusive to our clients and subscribers. |
On NFO announcements |
| MyPlanner / Portfolio Tracker |
Tracks stocks, mutual funds, cash flows, assets and liabilities. Exclusive to our clients and subscribers. |
Online, Real-time |
A unique value proposition
FundSelect Plus is a service that will empower you to make the best of your mutual fund investments.
Rs 8,500 (including Service Tax) is all you need to invest for a one-year subscription to FundSelect Plus. Certainly, it's a unique value proposition that you should not miss out on. A two-year subscription is priced at Rs 13,500 (saving of Rs 3,500).
Sign Up! One-year | Two-years
Why FundSelect Plus?
Just as thousands of stock-market investors fall prey to 'tips' offered by commission-hungry stock brokers (the brokers make a nice little commission each time they make you sell stock "A" and buy stock "B"), many unsuspecting investors are lured into investing in poorly-managed mutual funds by their "relationship managers".
Personalfn - created by the same company that has built Equitymaster into India's leading independent equity research initiative - is determined to empower you with independent and honest advice on mutual funds that are best suited to meet your investment needs and objectives.
This is where FundSelect Plus comes to the investor's rescue!
FundSelect Plus is a portfolio recommendation service, which will guide you as you go about planning your mutual fund investments. As a subscriber, you get access to model portfolios of equity and debt funds, which are customised for various risk appetites and investment tenures. Since it is only a recommendation service, you can choose to act on it or ignore it. And of course you can transact through any distributor/agent you wish to.
In short, we have nothing to gain and nothing to lose from your actions. Our remuneration comes from the subscription fee paid by you. We are indifferent to the lucrative commissions and perks offered by fund houses.
Rs 8,500 (including Service Tax) is all you need to invest for a one-year subscription to FundSelect Plus. Certainly, it's a unique value proposition that you should not miss out on. A two-year subscription is priced at Rs 13,500 (saving of Rs 3,500).
Sign Up! One-year | Two-years
FundSelect Plus - A unique value proposition
FundSelect Plus is a service that will empower you to make the best of your mutual fund investments.
Rs 8,500 (including Service Tax) is all you need to invest for a one-year subscription to FundSelect Plus. Certainly, it's a unique value proposition that you should not miss out on. A two-year subscription is priced at Rs 13,500 (saving of Rs 3,500).
Sign Up! One-year | Two-years
| Effective cost of FundSelect Plus |
Investible Surplus
per annum (Rs) | Cost as % of
Investible surplus |
| 1,000,000 | 0.85% |
| 2,500,000 | 0.34% |
| 5,000,000 | 0.17% |
| 10,000,000 | 0.09% |
| * FundSelect Plus is priced at Rs 8,500 pa (incl. Tax) |
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What this table shows you is that the cost of having access to honest and credible mutual fund research is nothing compared to the entry load that you presently pay! Even if you have an investible surplus of Rs 1,000,000, the corresponding savings are huge. As your investible surplus grows, so do the savings!
Factor in the other benefits that FundSelect Plus offers and your effective savings are compounded further.
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Sign Up! One-year | Two-years
FundSelect Plus Methodology
Mutual fund investing is serious business and as an independent research outfit, we understand the mutual fund segment better than most others.
FundSelect Plus Portfolios include funds which Personalfn's Research Team regards as best suited for a particular investor category. Every mutual fund scheme undergoes extensive scrutiny and makes the grade on a number of parameters before being selected. Experience suggests that many funds are capable of clocking impressive growth and featuring as top performers in their respective segments across time frames; however such funds (much to the disappointment of some subscribers) may not necessarily feature in our Portfolios. What we look for is stable and sustained performance across various parameters (including returns). This note will help readers understand what it takes for a mutual fund scheme to feature in the FundSelect Plus Portfolios and also appreciate the intricacies of the selection process.
1. Fund House
We place a lot of emphasis on the fund house and its investment processes. In fact the fund house is required to pass muster before any of its schemes can be considered for selection. We prefer fund houses which are strong on systems and processes vis-à-vis the ones where fund managers call the shots. Having said that, the fund manager is given due importance in our selection process. Our one-on-one interactions with fund managers give us an insight into the fund manager's philosophy and mind-set and how it fits with that of the fund house.
2. Performance
Unlike many mutual fund research initiatives, for us, performance is not restricted just to net asset value (NAV) appreciation. While considering the NAV growth, the appropriate time frame is considered. For example, a diversified equity fund is expected to deliver consistently over at least a 3-Yr time frame, before it can be considered. We believe in studying a fund's performance across cycles, i.e. greater emphasis is placed on the fund's performance during a downturn in markets. Its performance during a bear phase is studied and compared with that of its peers and benchmark index. Similarly, the fund's performance on factors like volatility control (Standard Deviation) and risk-adjusted return (Sharpe Ratio) is closely scrutinised.
3. Adhering to the investment mandate
We believe that a fund must religiously adhere to its investment mandate at all times, irrespective of market conditions. For example, we have observed funds positioned as large cap funds getting invested in the mid cap segment when the latter hits a purple patch. Or diversified equity funds taking unduly high exposure to a particular industry during a rally in that segment (remember the tech rally for instance).
In our books, such a brand of fund management works well (if at all), only over the short-term and is therefore unsuitable for long-term investors.
4. Portfolio management
We study the fund's portfolio management style. The stock selection, consistency in holdings, top holdings and sectoral concentration are all put under the scanner and regularly monitored. An important metric is the fund management team's ability to identify a stock/sector/investment theme ahead of the competition.
Only funds which deliver goods on the above criteria and do so consistently are eligible for selection in the FundSelect Plus portfolios. Once a fund is selected, Personalfn's Research Team allocates the fund to a given portfolio in an appropriate proportion; the fund's characteristics play an important role in determining where it fits in and in what allocation.
FundSelect Plus provides users with 6 portfolios. For equity-oriented investments, we have chosen the investor's risk appetite as the deciding criterion, hence 3 separate portfolios for conservative, moderate and aggressive investors. Conversely, investment tenures (time frames) have been selected as the distinguishing feature for the debt portfolios.
Subscribers should note that FundSelect Plus portfolios are essentially model portfolios and they cannot be treated as specific recommendations. For instance, the Aggressive Portfolio (for equity investors) should prove suitable for a large category of aggressive investors, but if a particular aggressive investor wishes to tweak the Portfolio a little based on his own risk appetite, he can choose to do so after consulting his investment advisor. To that end, the FundSelect Plus Portfolios must be utilised as indicative portfolios. Subscribers must employ the services of an investment advisor for creating a portfolio that is best suited for their own needs and satisfies their investment objectives.
Rs 8,500 (including Service Tax) is all you need to invest for a one-year subscription to FundSelect Plus. Certainly, it's a unique value proposition that you should not miss out on. A two-year subscription is priced at Rs 13,500 (saving of Rs 3,500).
Sign Up! One-year | Two-years
FundSelect Plus Evaluation Process
Model portfolios under FundSelect Plus are meant to serve as reference points for investors. As part of the evaluation process, we actively monitor the schemes, their allocations and make changes when necessary. However, strategies like booking profits or holding a portion of the portfolio in cash are not employed; rather each FundSelect Plus Portfolio is managed assuming that the investor stays fully invested at all times. Subscribers must view the performance of the FundSelect Plus Portfolios relative to their benchmark portfolios and indices (wherever available).
We undertake a review of the Portfolios every month; the performance of the schemes and the Portfolios are discussed therein. Schemes which undergo a change in character and no longer meet our pre-determined parameters will be omitted from the Portfolios. Similarly, we will also consider adding to the Portfolios new schemes that meet our parameters.
Given that mutual fund schemes in the FundSelect Plus portfolios have well-established track records and have been selected with a long-term view, we do not see too many changes (in terms of scheme churn) being made in the monthly reviews. Changes will be the exception, rather than the rule. Personalfn does not favour churning of mutual fund schemes. This only adds to the cost in terms of entry/exit loads, thereby impacting returns adversely.
Rs 8,500 (including Service Tax) is all you need to invest for a one-year subscription to FundSelect Plus. Certainly, it's a unique value proposition that you should not miss out on. A two-year subscription is priced at Rs 13,500 (saving of Rs 3,500).
Sign Up! One-year | Two-years
Who should subscribe to FundSelect Plus
Subscribers who have seen FundSelect are probably wondering how different FundSelect Plus is from its predecessor. The products are complementary and yet serve very different purposes. FundSelect has a pointed recommendation on a mutual fund scheme on a weekly basis (along with a downloadable mutual fund database in excel format which is updated daily).
FundSelect Plus goes a step further; it selects funds that are best suited for investors. Personalfn's Research Team recommends 6 model portfolios for investors with varying risk appetites and investment tenures. Investors can then 'execute' the model portfolio by investing in the funds in the allocation recommended by the model.
FundSelect Plus is for investors who want to know upfront which fund, among the hundreds available, should actually make it to their portfolios and in what allocation. To that end, the FundSelect Plus defines the funds that should come in the 6 portfolios along with a precise allocation against each fund.
Broadly, FundSelect Plus is particularly relevant for 4 sets of investors:
The High Net worth Individual (HNI) is a very relevant candidate for the FundSelect Plus. It is common knowledge that the HNI's finances are controlled by relationship managers who are often more concerned about their commissions and targets than what is good for their clients' finances. The poor quality of advice offered by relationship managers to their HNI clients is evident in 2 activities - pushing new fund offers (NFOs) and churning schemes aggressively. Both these moves can land huge commissions for relationship managers, never mind the big hole in the HNI's portfolio from bearing the burden of commissions.
Another investor category that can be a major beneficiary of the FundSelect Plus is the Non-Resident Indian (NRI). The NRI recognises the potential of investing in India; however, he does not have access to credible research. Like the HNI, he has consistently been duped with unethical advice.
FundSelect Plus will empower the HNI and the NRI to keep a tab on the advice given by their bankers/relationship managers. Since the FundSelect Plus is a fee-based research service, there is no question of the advice being driven by commissions.
The Independent Financial Advisor (IFA) who is looking at providing his clients with credible and timely advice pertaining to mutual fund investments. This product will help the IFA differentiate his offering vis-à-vis the competition, which presently relies mainly on newspapers and magazines for their dose of 'so-called' mutual fund research. With the help of the FundSelect Plus , the IFA will be better equipped to help his client to generate above-average return at lower risk.
Any mutual fund investor who does not have access to credible mutual fund research and advice.
Rs 8,500 (including Service Tax) is all you need to invest for a one-year subscription to FundSelect Plus. Certainly, it's a unique value proposition that you should not miss out on. A two-year subscription is priced at Rs 13,500 (saving of Rs 3,500).
Sign Up! One-year | Two-years
FundSelect Plus Benchmark Portfolios
Benchmarking the FundSelect Plus portfolios was quite a task. The easier route would have been to use commonly available indices; for example the BSE Sensex could have been used for benchmarking the equity portfolios and the CRISIL Composite Bond Fund Index for the debt portfolios. However, the trouble with such an approach is that the aforementioned indices need not be truly indicative of the risk inherent in the portfolios. For instance, an aggressive investor will aim at outperforming the Sensex in a big way, while the conservative investor may be content with outperforming the Sensex marginally. Also, funds in the FundSelect Plus portfolios may be invested in stocks outside the Sensex stocks in which case benchmarking against the Sensex would not be meaningful.
We decided to counter this situation by constructing 'benchmark portfolios' for both the equity and debt Portfolios. In other words, like FundSelect Plus Portfolios, mutual fund schemes were handpicked and benchmark portfolios for each category were created. Assets under management (AUM) was chosen as the starting point for selecting funds for both the equity and debt benchmark portfolios.
The reason why we chose the AUM is because it underlines the higher investor interest in these funds. By including these 'high AUM' funds in the benchmark portfolios, our communication to investors is that - since you have chosen to be invested in these funds, now benchmark them against the FundSelect Plus Portfolios to evaluate which is the better portfolio.
That is not to say that funds that appear in the benchmark portfolios do not appear in the FundSelect Plus Portfolios. Funds from the benchmark portfolios that meet our research processes and criteria can be a part of the FundSelect Plus Portfolios.
It should be noted that we have considered the "Growth" option for the FundSelect Plus portfolios across the board.
Finally, to be as realistic as possible, we have factored in the entry loads for all FundSelect Plus Portfolios and benchmark portfolios while allocating monies across schemes. This is relevant because when subscribers invest in mutual funds based on the FundSelect Plus recommendations, they will incur an entry load.
Equity portfolios benchmark
For the equity portfolios benchmark, we chose the largest funds in terms of AUM (as on May 31, 2007). Furthermore, only equity funds with a history of at least 3 years were considered. This was important on account of various factors. Firstly, we have always maintained that one should invest in equities for a minimum tenure of 3 years; hence the same standard was applied while constructing the benchmark.
Secondly, a number of new fund offers (NFOs) launched over the past 2 years have managed to mobilise record asset sizes and emerge as the largest funds in their respective categories. These NFOs have not been considered. Apart from the fact that they don't have a 3-Yr track record, these funds have largely been modest performers at best. By discarding such funds, we have made the FundSelect Plus benchmark portfolios that much more vigourous and representative. Sector funds, thematic funds and tax-saving funds have not been considered while constructing the benchmark portfolios on account of factors like lack of diversification and a lock-in period.
Having short-listed the largest equity funds, we then began sifting funds based on their risk profile and investment style. To benchmark the FundSelect Plus Conservative Portfolio (lowest risk), we chose equity funds that are conservatively managed. For this purpose, we considered large cap funds and value style funds. Conversely, for the FundSelect Plus Aggressive Portfolio, we short-listed the aggressively managed funds; for example, funds with a bias for mid cap stocks and those pursing the opportunities style were chosen. The benchmark for the FundSelect Plus Moderate Portfolio was constructed as an average of the benchmarks for the Conservative and Aggressive Portfolios.
To ensure that there is an adequate level of 'diversification' in the benchmark portfolios, we have populated them with 5 funds each, with every fund carrying equal weightage.
Debt portfolios benchmark
For the debt portfolios benchmark, we chose the largest funds in terms of AUM (as on May 31, 2007). Furthermore, only debt funds which offer a retail option (defined as a maximum investment of Rs 100,000) were selected while constructing the benchmark portfolio. This meant that some of the larger funds in categories like liquid funds, that don't offer a retail option, were not selected while constructing the benchmark portfolios. Also, we did not filter the debt funds based on the minimum 3-Yr existence, since unlike equities, being invested in debt for a longer investment horizon may not be as important.
The unavailability of conventional debt fund indices in public domain is another reason for constructing the benchmark portfolios. Also in our view, some of the conventional debt fund indices fail to be truly representative of offerings from the debt funds segment.
For the Less than 3 months Portfolio, liquid funds were chosen for constructing the benchmark portfolio. Long-term floating rate funds were short-listed for the 3 - 12 months Portfolio. Finally, conventional long-term debt funds and debt funds pursuing the "flexi" investment style (i.e. funds that can invest in debt across maturities and instruments) were chosen to construct the benchmark for the More than 12 months Portfolio.
Rs 8,500 (including Service Tax) is all you need to invest for a one-year subscription to FundSelect Plus. Certainly, it's a unique value proposition that you should not miss out on. A two-year subscription is priced at Rs 13,500 (saving of Rs 3,500).
Sign Up! One-year | Two-years
FundSelect Plus FAQs
Do I get access to all the portfolios when I subscribe to FundSelect Plus?
Yes, as a FundSelect Plus subscriber you have access to all the 6 portfolios, 3 each for equity funds and debt funds.
Do I miss out if I subscribe to FundSelect Plus midway, after the launch date?
No, you do not miss out at all. All you need to do is invest in the Portfolios at the existing allocations and not what they were at the time of launch. For instance, on the day you subscribe to FundSelect Plus, if a particular fund, say Fund A, has 27% allocation in the Aggressive Portfolio (original allocation 25%), your investment in Fund A must also be 27% (present allocation) and not 25% (original allocation).
Moreover, we maintain a history of all Portfolios and review notes since inception of the service; so even if you subscribe to FundSelect Plus after the launch date, you can always view the historical portfolios and reviews notes.
What is Personalfn's track record in researching mutual funds?
Personalfn has a track record of 10 years in researching and identifying mutual funds that are best suited for investors.
How often are FundSelect Plus Portfolios reviewed?
All FundSelect Plus Portfolios are reviewed every month. There is a detailed review note on each Portfolio, wherein each fund and its allocation is discussed at length. Our view on the Portfolios, along with the reasons for a change, if any, in the fund/allocation is outlined in detail. It is pertinent to mention here that a review will not necessarily mean that the recommended Portfolios will undergo a change. We dislike churn and it is very likely that our Portfolios will not change much on a monthly basis.
Will the Portfolios be churned aggressively?
We despise churn. Since we have a long-term view on the funds in FundSelect Plus Portfolios, it is certain that we will not make any unnecessary changes to our portfolios. However, those mutual funds from the Portfolios which no longer meet our pre-determined parameters will be omitted. Similarly, we will also consider adding mutual funds that merit inclusion into the Portfolios. Changes will be the exception, rather than the rule. Personalfn does not favour churning of mutual fund schemes. This only adds to the cost in terms of entry/exit loads, thereby impacting returns adversely.
If FundSelect Plus Portfolios are not churned, why should I renew my subscription?
FundSelect Plus is a service that offers various benefits. While the Portfolios appear to be one-time recommendations, we undertake a detailed review every month and share our views on the same with subscribers. It is possible that some of these reviews may result in a reallocation within the same scheme; there is also a chance that the schemes in the Portfolio may change. Our review notes will ensure that the long-term objectives of the Portfolios are realised.
Over time we may consider adding new Portfolios, to FundSelect Plus, which cater to other needs.
In addition, as a subscriber you will benefit from the following services:
» Investment ideas:
A view on equity and debt markets followed by an idea most suited for the prevailing investment scenario.
» FundSelect:
Detailed research reports on leading mutual fund schemes. Report available online and in PDF format.
» NFO research:
Research reports on leading new fund offers.
» MyPlanner / Portfolio Tracker:
Track stocks, mutual funds, cash flows, assets and liabilities.
Are FundSelect Plus Portfolios comparable to real-life investments?
While FundSelect Plus serves as a reference point to investors, we do expect investors to invest in line with our recommendations. With that objective, we have made FundSelect Plus as real-life as possible. So among other factors, we have factored in entry loads (in the our Portfolios as well as benchmark portfolios) because we know investors will also incur them; we have taken the retail option in the Debt Portfolios because we understand that a lot of subscribers may not be eligible for the institutional option where the minimum investment runs into crores (Rs 1 crore = Rs 10 m).
Am I required to transact through Personalfn?
No. FundSelect Plus is only a recommendation service; you can choose to act on it or ignore it. If you choose to act on our advice, you can transact through any distributor/agent of your choice.
Rs 8,500 (including Service Tax) is all you need to invest for a one-year subscription to FundSelect Plus. Certainly, it's a unique value proposition that you should not miss out on. A two-year subscription is priced at Rs 13,500 (saving of Rs 3,500).
Sign Up! One-year | Two-years
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