Amol Joshi, Founder of PlanRupee Investment Services, explains that the recommendation of a mutual fund scheme goes beyond just performance metrics or the size of the fund house. “Mutual fund schemes are recommended based on the suitability of a scheme in the portfolio of our investor and not the size of the AMC. Having said that, we certainly look at parameters like fund house philosophy, scheme and fund managers’ performance across market cycles, vintage, etc.,” says Joshi.
Indeed, while small and mid-sized AMCs may sometimes offer higher returns due to their nimbleness or unique strategies, advisors tend to focus first on whether a scheme aligns with the client’s financial goals, risk tolerance, and investment horizon. This means factors like the fund’s consistency across market cycles, the track record of its fund manager, and the broader philosophy of the AMC play a critical role in the selection process.
Moreover, access to information has significantly levelled the playing field between large, established fund houses and emerging ones. As Joshi points out, “Due to the ease of availability of information, which was earlier limited to big and visible brands, investors are certainly open to as well as familiar with newer and growing fund houses. This visibility creates easier acceptance if the product proposition is compelling.”
Digital platforms, research tools, and increased investor education have empowered individuals to go beyond brand names and explore the underlying fundamentals. While brand trust still plays a role, it no longer solely dictates fund choices. Investors today are more receptive to hearing about lesser-known AMCs if the product matches their needs and has a sound rationale behind it.
That said, past performance continues to be a point of interest for most investors. “Investors in general do certainly have a keen eye for past performance. But we do update and educate them on other factors like valuations, decisions around SIP or lumpsum, and above all, asset allocation,” adds Joshi.
Ultimately, advisors make recommendations based on a holistic view, rather than chasing returns or promoting small AMCs indiscriminately. For investors, this approach helps build a more balanced and goal-oriented portfolio.