PersonalFN's mutual fund ratings is a scheme rating system which helps identify mutual fund schemes standing strong on all parameters. Our goal of creating PFN Mutual Fund Rating is to help investors select funds that will show consistency and outperform in future.
From the universe of around 2,500 mutual fund schemes across equities, hybrids, debt and liquid, PersonalFN aims to provide you with a comprehensive list of finest schemes to choose from. PersonalFN mutual fund rating helps you to comprehend where the scheme stands vis-à-vis its peers when tested on all parameters.
Most popular mutual fund rating systems are based preferably on past performance numbers but PersonalFN believes that past performance is not the only factor to consider while evaluating mutual funds. Past performance may or may not be achieved in future.
PersonalFN Research has identified and implemented key parameters that will help find funds that will outperform in future. Apart from quantitative we also focus on various qualitative factors that help achieve the overall performance of the fund. PersonalFN believes that if the fund houses investment philosophy, process and systems are in place, it will result in a radiant performance of the fund in future.
The output of our rating system is derived from our stringent scoring model, which ensures that the scheme is tested on various quantitative as well as qualitative parameters and accordingly compared and scored vis-à-vis its peers. The schemes able to pass through our rigorous test and achieve the maximum composite score on all parameters (based on pre-specified weightages) will get higher star rating.
Methodology for PersonalFN mutual fund Ratings
PersonalFN mutual fund rating is derived from our exclusive scoring model which tests mutual fund schemes on both quantitative and qualitative parameters.
Diversified Equity Mutual Funds
- From the universe of equity schemes, only diversified equity schemes with a track record of minimum 3 years are taken for analysis.
- Shortlisted funds are tested on various quantitative parameters like 1 Year Rolling Returns, 3 Year Rolling CAGR, 5 Year Y-o-Y Average Rolling Returns and risk return parameters like Sharpe Ratio, Sortino Ratio and Standard Deviation.
- Schemes falling in the top 50 percentile on the combined score of the above quantitative parameters will be shortlisted for PersonalFN Rating.
- Other quantitative score for performance across market cycles is also applied to total score.
- Schemes are scored on qualitative parameters in terms of portfolio characteristics like concentration analysis, portfolio turnover, expense ratio, etc. The score of the same is considered for total scoring.
- Fund house scoring on parameters like fund manager to scheme ratio, work experience of the fund manager, % of AUM performance etc. are also considered for total scoring.
- Schemes falling in the top 50 percentile on the composite score of the above quantitative and qualitative parameters will be shortlisted for PersonalFN Rating.
- Schemes not making it to the top 50 percentile will not be rated.
- The composite scoring on both the quantitative and qualitative parameters (as mentioned above) stands as the base for PersonalFN equity mutual fund rating which is scored as under:
| Scoring Levels |
Rating |
Expectation |
PersonalFN View |
| Top 10 Percentile of composite score |
 |
Outperformer |
Strong Buy |
| Next 20 Percentile of composite score |
 |
Performer |
Buy / Hold |
| Next 30 Percentile of composite score |
 |
Average Performer |
Hold |
| Next 25 Percentile of composite score |
 |
Below Average Performer |
Hold / Can Sell |
| Next 15 Percentile of composite score |
 |
Underperformer |
Sell / Can Hold (On Watch list) |
| Schemes not short listed on our parameters / falling in bottom 50 percentile |
Unrated |
Underperformer |
Strong Sell |
| Not meeting minimum track record criteria |
Unrated |
Relatively New |
No View |
Debt and Liquid Funds
- Fund house with a minimum 3-year track record is considered for analysis of debt mutual funds; the funds are identified and placed in their respective category and shortlisted as per the pre-specified minimum years of existence.
- Shortlisted schemes are tested on quantitative parameters like Rolling absolute / CAGR score over various time frames (based on scheme category), performance across interest rate cycles, risk return ratios (Std. Deviation, Sharpe Ratio and Sortino Ratio), and expense ratio.
- And other qualitative parameters like average maturity, modified duration, YTM, portfolio characteristics and credit quality score.
- Fund house scoring on parameters like fund manager to scheme and fund manager experience performance is also considered for total scoring.
- Schemes falling in the top 50 percentile on the combined score of the above quantitative and qualitative parameters will be shortlisted for PersonalFN Rating.
- Schemes not making it to the top 50 percentile will not be rated.
- The composite scoring on both the quantitative and qualitative parameters (as mentioned above) stands as the base for PersonalFN debt mutual fund rating which is scored as under: