The system doesn’t have no human intervention in rating the funds and uses algorithms and big data to analyse various MF schemes.
Discount broker Samco Securities has ventured into the mutual fund (MF) research and distribution business, and has launched RankMF. The system doesn’t have no human intervention in rating the funds and uses algorithms and big data to analyse various MF schemes. It provides an independent proprietary rating and ranking system to help investors opt for the right MF scheme. In addition to rating and ranking based on past performance, RankMF also considers factors such as expense ratios, standard deviation, beta, market valuations and multiples, portfolio holdings, diversification, cash ratio, size, and predicted yields, among others. Samco Securities,RankMF,
The platform claims to analyse the quality of actual portfolio holdings apart from historical returns. Omkeshwar Singh, who had been the head of BSE StaR MF, will be leading the RankMF platform. “The platform not only rates and ranks the entire universe and uncovers many of the important data available that were previously never considered by research and rating agencies,” said Omkeshwar Singh. Gautam Roy Sinham, associate director – fund manager at Motilal Oswal, agrees that past returns are never a great predictor of future performance. “So, it is important to look at the current portfolio while choosing mutual funds to invest in.”
Jimeet Modi, chief executive at Samco Securities, said around 69% of mutual funds still can’t beat the indices and only 57% of AUM is with the top 5 brands.
According to RankMF, 82% of the Motilal Oswal equity MFs have been given five-star ratings and 100% of PPFAS equity mutual funds have been given four-star rating. RankMF platform has also introduced margin of safety index to guide investors if it is the right time to invest in a fund. Samco Securities claims to look at the entire universe and scan opportunities for investors. “For example, UTI MNC Fund – which has been around for over 20 years – has delivered a compound annual growth rate of over 17%. However, it is unrated by most research and advisory committees,” added Jimeet.