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Fund Selection

Objective

This policy defines the framework for objective, consistent, and suitable mutual fund recommendations aligned with client goals, risk profile, and applicable AMFI guidelines. Our aim is to help investors make informed decisions through a structured and transparent fund selection process.

Scope

This policy applies to all employees, authorized persons, and sub-distributors associated with CAPKCO FINSERV PVT. LTD. It covers open-ended mutual fund schemes including equity, debt, hybrid, index, and solution-oriented funds offered through lumpsum, SIP, STP, SWP, and switch transactions.

Core Principles

  • Compliance First: All recommendations adhere to AMFI guidelines and the AMFI Code of Conduct for Mutual Fund Distributors.
  • Evidence-Based: Fund selection is based on quantitative and qualitative analysis, not promotional incentives.
  • Transparency: Investors are informed about risks, costs, commissions, and conflicts of interest where applicable.
  • Suitability: Recommendations are matched to the investor’s risk profile, investment horizon, and financial goals.
  • Documentation: Rationale for fund selection and client communication is recorded for audit and review purposes.

Fund Selection Criteria

  • Legitimacy: Only mutual fund schemes offered by AMFI-recognized Asset Management Companies (AMCs) are considered.
  • Performance: Preference for funds ranking in the top quartile of their category over 3-year and 5-year periods (where data is available).
  • Risk Metrics: Evaluation of standard deviation, Sharpe ratio, and maximum drawdown relative to category peers.
  • AUM (Assets Under Management): Minimum AUM threshold of ₹500 Crore for equity and hybrid categories (exceptions for niche or thematic funds with documented rationale).
  • Portfolio Quality: Assessment of portfolio concentration, sector allocation, credit quality (for debt), and fund manager tenure.
  • Exclusion Criteria: Funds with persistent underperformance, frequent manager changes, regulatory warnings, or high expense ratios relative to peers may be excluded.

Peer Comparison & Evaluation

Each shortlisted fund is compared against at least five peers within the same category and sub-category. Evaluation includes:

  • Rolling returns (1Y, 3Y, 5Y) vs. category average and benchmark
  • Risk-adjusted performance metrics
  • Expense ratio and exit load comparison
  • Portfolio turnover and consistency of investment style

Fund lists are reviewed periodically. Material changes in fund performance or portfolio composition trigger re-evaluation.

Suitability & Risk Mapping

Investor risk profiles are mapped to suitable fund categories as follows:

  • Conservative: Liquid, ultra-short, short-duration debt funds; conservative hybrid funds
  • Moderate: Balanced advantage, aggressive hybrid, large-cap equity, index funds
  • Aggressive: Mid-cap, small-cap, flexi-cap, sectoral/thematic, international equity funds

Final fund selection within the mapped category is based on the criteria outlined above and the investor’s specific requirements.

Grievance Redressal

For any concerns related to fund recommendations or distribution services, investors may contact:

Email: info@capkco.in
Phone: +91 63551 80019
Address: 10th Floor, Addor Aspire-2, Block B, 1003-1004, University Rd, opp. Old passport office, Gulbai Tekra, Ahmedabad, Gujarat 380015

For detailed grievance procedures, please refer to our Investor Grievance Redressal page.

Disclaimer

CAPKCO FINSERV PVT. LTD. is an AMFI Registered Mutual Fund Distributor (ARN-319386). Fund recommendations provided are incidental to distribution services and do not constitute personalized investment advice. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. Past performance is not indicative of future results.