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There are three crucial things that are required for investing into direct equities - time, money and access to information. Dearth of any one can leave you handicapped. For all those who lack any of the three it is better to have a professional fund manager handle their investments through mutual funds. Investing in mutual funds has many advantages; diversification, low cost of asset management, liquidity, effortless process and strong regulations by a governing body. There are a lot of mutual funds available today from over 35 mutual fund companies. Depending on their investment objective and portfolio, these mutual funds can further be classified into various categories. Every person is unique and an investment strategy or category which is applicable to one person may not be applicable to another. Therefore it can be confusing to narrow down on a mutual fund which is a strong performer in a category depending on your need.

At PeakAlpha we have made this whole process even simpler for you. We have developed a proprietary model, PeakFilter, which will pick do the job of picking out the top performing mutual funds. Peak Filter in simple terms is a sieve used to separate the performers from the non performers, based on their numbers alone. PeakFilter categorises all the mutual funds on the basis of their investment objective into different categories. Some of the main categories in mutual funds are mentioned below

  • Equity linked savings schemes which are instruments that come under Section 80 C giving a tax benefit
  • Sector funds that have a portfolio of stocks from a particular sector like power sector or banking sector.
  • Theme based funds have portfolios which follows a particular theme like lifestyle or infrastructure.
  • Mid Cap and Small cap funds have a portfolio largely comprised of mid cap stocks.
  • Multicap funds have a portfolio where the fund manager can at his discretion decide to be in either small or large cap stocks
  • Large Cap funds have a portfolio of large cap stocks.
  • Index funds have a portfolio of stocks which closely follows the portfolio of an index like the BSE Sensex or NIFTY.
  • Hybrid Equity funds invest in both equity and debt markets and are balanced funds.

Once these mutual funds are categorised, they are rated using 16 different parameters. These parameters look at the risk, returns, fundamentals and portfolio of each fund and assign a score. This process will help identify the top performers in each category. Based on the risk appetite using a risk measurement tool, we can identify the category which is appropriate for an individual depending on his goals. We at PeakAlpha not only promise that the advice we give is in the best interests of the customer, we also have processes and models in place in order to make sure that only the best instruments are recommended. PeakFilter is one such tool.

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