Fund Selection Policy
Fund & Product Selection Policy
1. Our 4-Step Product Selection Process
Investor Profiling
Structured risk assessment to understand goals, horizon, income, liabilities, and risk tolerance
Product Mapping
Match investor profile to suitable product categories using SEBI Riskometer and asset allocation framework
Scheme Evaluation
Evaluate specific schemes using quantitative and qualitative criteria — performance, costs, AMC reputation
Recommendation & Review
Present suitable options. Final decision always with investor. Periodic review at least annually.
2. Investor Risk Profiling
Before recommending any product, Aangi Investments conducts a structured investor risk profiling exercise covering:
- Age & Life Stage — Investment horizon typically decreases as investors approach retirement
- Income & Surplus — Monthly investable surplus after expenses and emergency fund allocation
- Existing Liabilities — Home loan, personal loan, education loan EMIs affecting investable capacity
- Financial Goals — Short-term (less than 3 years), medium-term (3-7 years), long-term (7+ years)
- Risk Tolerance — Emotional and financial capacity to absorb temporary portfolio losses
- Investment Experience — First-time investor vs experienced investor — affects product complexity
- Tax Bracket — Relevant for recommending tax-efficient investment options like ELSS
- Liquidity Needs — Emergency fund adequacy, upcoming financial commitments in next 3 years
3. Risk Profile Categories & Product Suitability Matrix
| Risk Profile | Suitable Fund Categories | Suitable Products | Avoid | Recommended Horizon |
|---|---|---|---|---|
| 🟢 Conservative Low risk tolerance, capital preservation priority |
Liquid, Overnight, Ultra Short Duration, Money Market, Short Duration Debt, Conservative Hybrid | Debt MFs, Liquid MFs | Small Cap, Sector/Thematic, Long Duration Debt, High Yield Credit | Less than 3 years |
| 🟡 Moderate Moderate risk, balanced growth |
Balanced Advantage, Aggressive Hybrid, Large Cap, Multi Cap, Index Funds, Balanced Hybrid | Hybrid MFs, Large Cap MFs, Index Funds | Small Cap (primary), Sector Funds (primary), Long Duration Debt | 3 to 7 years |
| 🔴 Aggressive High risk tolerance, wealth creation focus |
Flexi Cap, Mid Cap, Small Cap, ELSS, Thematic, Sectoral, International Funds | Diversified Equity MFs, ELSS | Liquid/Overnight for long-term goals, Capital Protection schemes | 7+ years |
4. Scheme Evaluation Criteria
Once the appropriate category is identified, Aangi Investments evaluates specific schemes using the following criteria:
Performance Track Record
3-year and 5-year returns vs benchmark and category average. Consistency of outperformance across market cycles.
Fund Manager Quality
Fund manager's experience, track record across market cycles, stability (low turnover), and investment philosophy.
AMC Reputation & Stability
AMC's AUM size, years of operation, parent company stability, regulatory compliance history, and overall franchise strength.
Expense Ratio (TER)
Total Expense Ratio compared to category average. Lower TER (all else equal) means better net returns for investors.
Risk-Adjusted Returns
Sharpe Ratio, Sortino Ratio, Standard Deviation — evaluating how much return is generated per unit of risk taken.
Liquidity & Portfolio Quality
Portfolio concentration, liquidity of underlying securities, credit quality (for debt), sector/stock concentration risks.
Fund Size (AUM)
Adequate AUM to ensure liquidity and operational efficiency. Avoid very small funds with closure risk and very large funds in mid/small cap categories.
Investment Style Consistency
Does the fund follow its stated investment mandate? Style drift (e.g. large cap fund buying small caps) is a red flag.
5. Conflict of Interest Policy
✓ Commission rates received from AMCs have NO influence on fund recommendations
✓ We do not maintain any formal or informal "preferred AMC" list for commercial reasons
✓ We do not participate in AMC-sponsored holidays, trips, or gifts that create conflict of interest
✓ We do not receive any incentives, rebates, or benefits beyond the standard trail commission disclosed on our website
✓ Scheme recommendations are documented with rationale before presentation to investors
✓ We do not switch investors between schemes to generate additional commission (churning)
✓ Direct Plans are always disclosed as an alternative, even though we do not facilitate them
- Recommending schemes based on higher commission rates or incentives
- Churning — unnecessary switching of investor portfolios to generate commissions
- Accepting non-cash benefits, gifts above regulatory limits, or sponsored trips from AMCs
- Recommending close-ended NFOs or illiquid products without full risk disclosure
- Recommending products outside investor risk profile without written unsuitability declaration
6. Unsuitability Declaration Process
If an investor wishes to invest in a product that does not match their assessed risk profile, Aangi Investments follows this process:
- Step 1 — Inform: Aangi Investments will clearly communicate in writing that the chosen product is outside the investor's risk profile
- Step 2 — Explain Risks: A detailed explanation of the specific risks of the product — volatility, liquidity, downside potential
- Step 3 — Formal Declaration: Investor must sign a formal Unsuitability Declaration acknowledging the risk mismatch
- Step 4 — Process Transaction: Only after receiving the signed declaration will the transaction be processed
- Step 5 — Record Keeping: Unsuitability declarations are maintained for a minimum of 8 years as part of client records
7. Portfolio Review Policy
- Annual Review: Aangi Investments conducts a comprehensive portfolio review with every investor at least once a year
- Triggered Review: Additional reviews are initiated when there is a material change in investor's financial situation, goals, or life stage
- Market Event Review: During significant market events (15%+ correction or rally), investors are proactively communicated with
- Fund Change Review: When a recommended scheme undergoes fundamental changes (fund manager change, mandate change, merger), investors are informed and alternatives reviewed
- Rebalancing: Portfolio rebalancing is recommended when actual asset allocation deviates significantly (more than 10%) from target allocation
8. Record Keeping & Compliance
- All investor risk profiles, financial goal discussions, and recommendation rationale are documented and maintained
- Records retained for minimum 8 years as per SEBI and AMFI requirements
- All unsuitability declarations maintained as permanent client records
- This Fund Selection Policy is reviewed and updated at least annually or when there are regulatory changes
- Policy is available for inspection by AMFI, SEBI, or any regulatory authority on request
Contact for policy queries:
Maitrik Sanghavi | Proprietor | aangiinvestments@gmail.com | +91 99246 55449 | www.aangiinvestments.com
AMFI Registered Mutual Fund Distributor ARN-85723
AMFI
AMFI Registered Mutual Fund Distributor
We earn trail commission from AMCs on client investments in Regular Plans. No additional distribution fee is charged separately to investors. Aangi Investments is a brand associated with Maitrik Sanghavi, a Proprietorship firm (PAN: BFHPS6083Q | GSTIN: 24BFHPS6083Q1ZL), at the above office address.
Aangi Investments is a Mutual Fund Distributor (ARN-85723) — NOT a SEBI-registered Investment Adviser. We provide incidental distribution services only and do not offer investment, tax, or legal advice. For investment advice, please consult a SEBI-registered Investment Adviser.
Risk Factors — Investments in Mutual Funds are subject to market risks. Please read all scheme related documents carefully before investing. Mutual Fund schemes do not assure or guarantee any returns. Past performance of any scheme may or may not be sustained in future. There is no guarantee that the investment objective of any suggested scheme shall be achieved. Investors are advised to evaluate the exit loads and other cost structure (TER) applicable at the time of making the investment. Aangi Investments deals in Regular Plans only for Mutual Fund Schemes and earns a trailing commission on client investments; commission earnings are disclosed to clients at the time of investment. The option of a Direct Plan, offering a lower expense ratio, is available to investors. We are not entitled to earn any commission on Direct Plans, and hence we do not deal in Direct Plans.
Disclaimer — Aangi Investments is an AMFI Registered Mutual Fund Distributor (ARN-85723). Mutual Fund investments are subject to market risks. Please read all scheme related documents carefully before investing. Past performance is not indicative of future returns. We do not provide investment or tax advisory services; the information on this website is for general information only and should not be treated as advice.
Regulatory: SEBI SCORES | SMART ODR | AMFI | SEBI