BAJAJ ASSET MANAGEMENT LIMITED.
BAJAJ ASSET MANAGEMENT LIMITED.
A mutual fund comparison tool is an online tool that helps investors evaluate multiple mutual fund schemes side by side based on key parameters. These may include historical performance, risk level, NAV, fund category, launch date and top holdings.
It enables investors to compare schemes within the same category, such as large cap funds or corporate bond funds, to maintain relevance. The tool does not predict future returns but provides structured data to support informed decision-making. By presenting information in a consistent format, it may help investors assess suitability based on their financial goals, risk appetite and investment horizon.
A mutual fund comparison tool works by allowing users to select up to three eligible mutual fund schemes and analyse them across multiple parameters. It presents scheme information in a standardised format for easier evaluation. Users can:
The tool then displays the information side by side, enabling investors to observe differences and similarities. The availability of return periods and other information may vary depending on the scheme’s history. Comparisons are indicative and may be considered along with further research and due diligence.
The figures shown are for illustrative purpose only.
The calculator is an aid, not a prediction tool. It may provide only an indicative picture.
Returns comparison is one of the key features of a mutual fund comparison tool, allowing investors to evaluate how different schemes have performed over specific periods. Based on scheme history and data availability, the tool may display returns for periods such as 1 year, 3 years and since inception. The comparative chart may also be viewed over 1 month, 3 months, 6 months, 1 year and since inception.
When comparing returns, it is important to consider that mutual fund performance is market-linked and may vary across different market cycles. A scheme that has performed relatively better in one period may not show similar outcomes in another. Investors may also separately review performance against the relevant benchmark and category average for additional context.
Key aspects to observe include:
• Consistency of returns across different periods
• Performance relative to the relevant benchmark, where separately available
• Comparison within the same category, such as large cap funds or hybrid funds
• Use of the same plan type and return period for all selected schemes
It is also important to avoid drawing conclusions based only on recent returns. Historical performance does not guarantee future results, and market conditions may change. Returns comparison may be useful as a starting point, but it should be combined with other factors such as risk, portfolio strategy and investment objective to assess overall suitability.
Past performance may or may not be sustained in future.
The fund overview section provides a concise summary of key details about a mutual fund scheme. It helps investors understand the structure and positioning of the fund within its category. This information is useful when comparing multiple schemes, as it establishes the context for performance and risk information. The comparison view may include:
• A brief description of the fund
• Fund category
• NAV and the applicable date
• Available historical returns
• Risk level
• Launch date
• Top 10 holdings
• A brief summary of scheme characteristics
Understanding the fund’s objective is essential, as different categories serve different investment purposes. For instance, equity-oriented schemes may focus on long-term growth potential, while debt-oriented schemes may seek income generation or capital preservation, subject to the scheme’s objective and applicable risks.
The overview also helps identify whether two funds are reasonably comparable. Comparing schemes within the same category generally makes the analysis more relevant. This section does not indicate future performance but provides foundational information that may support evaluation when used alongside returns and risk information.
The risk section provides context beyond returns by showing the risk level associated with each selected scheme. It may help investors assess whether the schemes have similar or different risk profiles.
Investors may review the latest Riskometer classification separately for each scheme. The Riskometer ranges from low to very high, and a scheme’s broad classification as equity, debt or hybrid does not by itself establish its precise risk level. Debt schemes may also be exposed to risks such as interest-rate, credit and liquidity risk.
The displayed risk level may change over time based on the scheme’s underlying portfolio and other applicable factors. It may therefore be considered along with the scheme’s investment objective, portfolio composition and the investor’s risk appetite and investment horizon.
Expense ratio and exit load are important cost-related factors to consider when comparing mutual fund schemes. However, these details are not displayed in the current comparison view and should be checked separately in the latest scheme-related documents.
The total expense ratio represents the recurring expenses charged to a mutual fund scheme for its operation and management. These expenses are calculated as a percentage of the scheme’s average NAV, and the daily NAV is disclosed after deducting the applicable expenses. A relatively higher expense ratio may reduce potential net returns over time, all other factors being equal.
Exit load is a charge that may apply when investors redeem or switch out their units within a specified period. The amount and applicable holding period may vary across schemes.
Key points to evaluate include:
• Expense ratio in comparison with similar schemes and the same plan type
• Possible impact of costs on net returns over time
• Exit-load structure and applicable holding period
A lower expense ratio alone does not establish suitability. Costs may be considered along with factors such as fund strategy, risk and performance consistency.
Fund holdings refer to the individual securities in which a mutual fund invests, such as equities, government securities or corporate bonds. Reviewing holdings helps investors understand where the fund is allocating its assets and the level of concentration within the disclosed portion of the portfolio.
The comparison tool displays the top 10 holdings of each selected scheme. Reviewing these holdings side by side may help users identify securities that appear in more than one fund. However, this does not represent a complete portfolio-overlap calculation, as the top 10 holdings do not cover the entire portfolio.
Key aspects to consider include:
• Concentration in the top holdings
• Securities appearing across multiple selected funds
• Sector or asset exposure reflected in the disclosed holdings
• Date of the portfolio information
For example, two large cap funds may hold several of the same companies because they invest within a broadly similar stock universe. This may influence the diversification achieved by holding both schemes.
Portfolio composition may change over time based on market conditions, cash flows and fund-management decisions. Investors seeking a complete overlap assessment may refer to the latest full portfolio disclosures.
The fund house, also known as the asset management company, and the fund manager play an important role in how a mutual fund scheme is managed. The AMC is responsible for the overall governance, compliance and operational framework of the scheme, while the fund manager makes investment decisions in line with its stated objective.
The current tool compares eligible schemes offered by Bajaj AMC and does not display detailed fund-manager information. Investors may separately review:
• Experience and tenure of the fund manager
• Investment processes and risk-management practices
• Consistency in managing the scheme across market conditions
• Any changes in the fund-management team
A fund manager’s approach to asset allocation, security selection and risk control may influence how the fund behaves across market cycles. However, outcomes remain subject to market conditions and cannot be predicted.
Fund-manager information may provide additional context when considered along with factors such as risk, cost, portfolio composition and investment objective.
Comparing mutual funds may help investors evaluate differences in historical returns, risk levels, portfolio characteristics and investment strategy within the same category. It provides a structured way to assess whether schemes may align with specific financial goals, risk appetite and investment horizon.
Since mutual fund performance is market-linked, comparison may support more informed evaluation rather than relying only on recent returns or a single data point. However, a comparison tool should be treated as a starting point and not as a recommendation to invest in a particular scheme.
When comparing equity mutual funds, investors may focus on parameters such as historical returns across market cycles, risk level and portfolio composition. Comparing funds within the same category, such as large cap funds with other large cap funds or multi cap funds with other multi cap funds, helps maintain relevance.
It may also be useful to separately review benchmark performance, expense ratio and consistency of returns over time. Equity schemes may experience significant market-linked fluctuations, and investors may review the latest risk level separately for each scheme.
Debt mutual funds may be compared based on factors such as portfolio quality, interest-rate sensitivity and historical performance. Investors may separately review metrics such as duration, maturity profile, credit quality and expense ratio to understand the risks associated with a scheme.
Comparing schemes within the same category, such as corporate bond funds with other corporate bond funds or liquid funds with other liquid funds, may provide a more like-for-like assessment. Debt funds are also subject to risks such as interest-rate, credit and liquidity risk.
When comparing hybrid mutual funds, investors may evaluate the allocation between equity, debt and other permitted asset classes, as this can influence the scheme’s risk and return characteristics.
It may also be useful to review historical performance, expense ratio, portfolio composition and consistency across market cycles within the same hybrid category. Investors may review the latest Riskometer separately for each scheme rather than infer its risk level only from its equity allocation.
Mutual funds are broadly classified into categories such as equity, debt and hybrid, with each category serving different investment objectives and carrying different types of risk.
Equity funds invest primarily in stocks and may offer long-term capital-appreciation potential but can experience significant market-linked volatility. Debt funds invest in fixed-income instruments and are subject to risks such as interest-rate, credit and liquidity risk. Hybrid funds invest across more than one asset class based on the scheme’s stated allocation strategy.
Within these broad types, there are sub-categories such as large cap funds, corporate bond funds and aggressive hybrid funds. Comparing funds within the same category may provide more relevant insights because schemes from different categories can have substantially different objectives, portfolios and risk profiles.
While comparing mutual funds, investors may sometimes rely heavily on recent returns without considering long-term consistency. This may lead to decisions based on short-term performance rather than overall suitability. It is important to evaluate available returns across multiple periods and consider how the scheme has behaved under different market conditions.
Other common mistakes include:
• Comparing funds across different categories, which may lead to misleading conclusions
• Comparing the Direct plan of one scheme with the Regular plan of another
• Ignoring risk level and portfolio concentration
• Treating unavailable historical returns as zero returns
• Assuming that the top 10 holdings represent the complete portfolio
• Overlooking expense ratio and exit load because they are not displayed in the comparison view
• Not reviewing the fund’s investment objective and strategy
• Treating past performance as an indication of assured future returns
No single parameter provides a complete assessment. Returns, risk, costs, portfolio composition and the scheme’s stated objective may be considered together.
CAGR is commonly used for a one-time investment, while XIRR is generally used for SIPs or investments involving multiple cash flows.
Mutual fund returns can be compared using the same period, plan type and fund category. Investors may also review performance against the relevant benchmark and across different market periods.
A mutual fund comparison tool can compare schemes by NAV, historical returns, risk level, category, launch date and portfolio holdings. Selecting the same category and plan type enables a like-for-like comparison.
A higher expense ratio may reduce potential net returns over time. Expense ratios may be compared across similar schemes and the same plan type, along with risk, portfolio composition and performance consistency.
Comparing mutual funds can highlight differences in risk level, asset allocation, sector exposure and portfolio concentration. This can help you assess whether a scheme aligns with your risk appetite and investment horizon.
Direct and Regular plans of the same scheme generally have a common portfolio and fund manager but different expense ratios. Direct plans exclude distributor commissions, which may create the potential for relatively higher net returns over time.
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Bajaj Finserv Limited, an unregistered Core Investment Company (CIC) under RBI Regulations 2020, is a part of the renowned Bajaj Group.
One of India’s leading and most diversified financial services institutions, Bajaj Finserv Ltd provides simple financial solutions to crores of people every day through its group companies. Through continuous innovation, it strives to enrich the lives of communities across the length and breadth of the country and make financial security accessible to all.
Our Investment Philosophy reflects what we, as an organisation, believe will generate a good return on equity investment for our investors in the long term. It dictates our goals and guides decision making.
Alpha (a) is a term used in investing to describe an investment strategy’s ability to beat the market.
Alpha is thus also often referred to as excess return or the abnormal rate of return in relation to a benchmark, when adjusted for risk. Essentially, it means doing better than the crowd without taking disproportionate risk.
Collecting superior information
Analysts and portfolio managers strive to collect superior information about the business and the management of the company. They try to generate superior earnings forecast and the balance strength of the company and the industry, thereby trying to 'beat the market' on information edge. This is an important source of alpha for an investor. However, over the years, retaining the information edge has become more difficult and expensive. With a whole lot of investors trying to collect superior information, how can an investor be sure to continuously have accurate and material information about the companies, ahead of others, all the time?
Processing information better
Even if you don't have material information earlier than the crowd, you can still generate better outcomes if you are able to process this information better. Investors develop models and algorithms with enhanced predictive powers to forecast the next move. Fund managers who invest based on some pure formal analytical models are quantitative managers. Here, the goal is to try and beat other investors based on the sophistication of procedures or analytics. The analytical edge can be quite useful until it gets copied by many, and then it may stop generating superior returns.
Exploiting behavioural biases
As the name suggests, this edge is achieved by superior behaviour in reacting to the inputs available to maximise alpha. Modern finance assumes people behave with extreme rationality. However, researchers in behavioural finance have shown that this is not true. Moreover, these deviations from rationality are often systematic. Behavioural managers try to exploit situations where securities are mispriced by the market because of behavioural factors. At Bajaj Finserv AMC, we endeavour to combine the best of these edges.
