The BT-MT awards honour mutual funds that gave high returns while being equally good at managing risk
The mutual fund industry's assets under management, or AUM, rose from Rs 10.8 lakh crore to Rs 12.3 lakh crore between March 2015 and March 2016. Equity funds' AUM went up from Rs 3.8 lakh crore to Rs 4.4 lakh crore.
This was despite the fact that the S&P BSE Sensex delivered a negative return in 2015/16. Equity funds saw net inflows of Rs 82,748 in 2015/16, the highest since 2007.
This clearly indicates the rising popularity of mutual funds. With bank fixed deposits offering only around 7 per cent, people are looking for alternatives.
How we Chose
Value Research was our knowledge partner for selection of winners on the basis of their risk-adjusted rating score. The data taken is as on March 31, 2016.
The Value Research fund rating score (risk-adjusted rating) is determined by subtracting the fund's risk score from its return score. On the basis of the rating score, the top 10 per cent funds in the category get five-star rating, the next 22.5 per cent funds get four-star rating, the middle 35 per cent get three-star rating, the next 22.5 per cent get two-star rating and the bottom 10 per cent get one-star rating.
The fund house with the highest percentage of top-rated funds (four and five star) in each segment was selected as the winner. The fund house with the maximum percentage of top rated funds (four and five star) in each segment was selected as winner.
The fund categories considered for the equity awards are : Large Cap, Multi Cap, Mid Cap, Small Cap and Tax Planning. Those considered for the debt fund awards are Income Funds and Gilt: Medium & Long term funds.
For the selection in debt category, the mainstream fixed income categories available for medium to long term investing for the retail investor were considered. The Dynamic Bond Funds qualify this criteria but they could not be considered because of insufficient track record.
For long-term categories - Long Term Asset Management House of the Year, Long Term Debt Management House of the Year and Long Term Equity Asset Management House of the Year, the five-year rating score was considered.
For short-term categories - Equity Asset Management House of the Year, Asset Management House of the Year, Debt Asset Management House of the Year, the funds were first sorted on three years rating score. The top five fund houses by three -year scores were then sorted by their one-year risk adjusted scores.