How to Use a Mutual Fund Analysis tool (Screener) to Differentiate Between All Fund Types

Most screener tools share a few common features:

• Filtering Options: Screeners let you sort funds by category, such as equity, debt, hybrid, or index, making it easier to focus on the type most relevant to you.

• Custom Parameters: You can apply filters such as risk level, expense ratio, fund house, or past performance to refine the list of funds that appear in the screener.

• Comparison Views: Screeners give you the option to place multiple mutual funds side by side, making it easier to study differences across the parameters you selected.

• Data Visualization: Some platforms display results in simple charts or tables so that fund information is easier to interpret at a glance.

• Free Screener Access: Many financial websites and apps provide a free screener, making it easy for investors to analyze and compare funds without cost.

A screener works on a simple principle: you provide inputs, and the tool filters results. For instance, you may select “equity funds” as a category, filter for a particular risk level, and set an investment horizon of five years. The screener will then generate a list of funds that match your filters.

If you’re using a mutual fund screener, you may select the benchmark index (such as Nifty 50 or Sensex) and review all funds that track that index. The idea is not to deliver advice or forecast returns but to simplify how you compare funds and organize available options.
 

• Fund Category: A screener allows you to filter schemes by category, such as equity, debt, hybrid, index, or solution-oriented funds. Each mutual fund category may align with different risk profiles and investment needs. Comparing mutual fund types may help you find funds that match your risk tolerance and investment goals. 

• Risk Level: Assessing your risk tolerance is crucial when making mutual fund investments. That’s why most screeners have a risk level filter. Funds are classified as low, low to moderate, moderate, moderately high, high, and very high risk options based on their potential risk exposure. This filter may help you select funds that match your risk-taking capacity. 

• Assets Under Management (AUM): Screeners sometimes let you sort funds by their total assets under management. A larger AUM reflects the size of the fund in terms of investor money managed. Looking at AUM may provide context on the fund’s scale, though it does not assure stability or future growth.

• Fund House (AMC): Some investors may choose to look at funds by a specific Asset Management Company (AMC), considering aspects such as reputation, service quality, or familiarity. Most mutual fund picker tools allow you to apply this filter so that you can view and compare schemes from a specific AMC more easily.

• Ratios and Data Points: In addition to these filters, some screeners include finer details like expense ratios, portfolio concentration, or category averages. These inputs help you see how funds differ in terms of costs and structure.

Here’s a step-by-step guide on how to use a screener tool:

• Step 1: Understand Your Risk Profile

  Before using the tool, think about how much risk you are comfortable with. Screeners often classify funds under categories like Low, Low to Moderate, Moderate, Moderately high, High, or Very High, which may help you compare options according to your comfort level.
   

• Step 2: Define Your Investment Objective

  Consider what you want your money to work toward. Some goals are linked to long-term growth, while others may focus on stability or shorter horizons. Having clarity here may make the screener inputs more meaningful.
   

• Step 3: Decide Your Time Horizon

  Screeners often allow you to view funds by investment duration. Thinking about whether your goal is short-term, medium-term, or long-term may help you apply filters that highlight relevant categories.
   

• Step 4: Choose Fund Categories

  Once you know your preferences, you can filter by broad fund types such as equity, debt, hybrid, or index. From there, you may go deeper into sub-categories like large-cap, mid-cap, or balanced advantage schemes, etc.
   

• Step 5: Apply Additional Filters

  Many screener tools include filters for expense ratio, fund size (AUM), ratings, or portfolio mix. Using these may give you a more refined view of the schemes displayed.
   

• Step 6: Compare Available Data

  After applying filters, the screener will present a list of funds. You may compare them side by side on parameters like risk category, expense ratio, or historical data, depending on the filters you select.
   

• Step 7: Review Further Details

  If any fund stands out, you can look at its fact sheet or other official documents. These may show the scheme’s investment approach, portfolio allocation, and other attributes, helping you understand it in more detail.
   

Using a screener provides several practical benefits for investors:

• Time-saving: Researching funds manually can take significant time. A screener shortens the process by presenting a filtered list within seconds, so you can quickly move from a broad universe of funds to a smaller, more manageable set.

• Customization: A screener lets you apply filters such as fund type, risk profile, expense ratio, or investment horizon. This flexibility allows you to focus only on the categories that match your personal preferences.

• Free Access: Many screener tools are available online at no cost. Their accessibility encourages more people to explore and compare funds without additional expenses, making them useful resources for planning and awareness.

• Informed Comparison: With features like side-by-side views and detailed data points, a mutual fund screener helps you study funds more effectively. It provides clarity on the differences between schemes without suggesting which fund to select.

• Comprehensive View: Instead of checking multiple sources, a screener collects information on different funds in one place. This centralised access makes it easier to look at options across equity, debt, hybrid, and index categories together.

While free screener tools may be useful for MF performance comparisons, you still need to be mindful of the way you use them and interpret results. Here are a few common mistakes most people make when using these mutual fund comparison tools:

• Relying Only on the Past Performance Parameter: Some investors look mainly at past performance, but doing so without considering costs, risk levels, or other factors may give an incomplete view.

• Ignoring Fund Category Differences: Equity, debt, hybrid, and index funds serve different purposes and carry different levels of risk. Comparing them directly in a screener may create confusion unless you are looking at similar categories.

• Treating Screener Outputs as Forecasts: The numbers and comparisons provided by a screener are based on past data and selected inputs. They should not be seen as predictions or guarantees of how a fund will perform in the future.

• Overlooking Investment Goals: If you use a screener without first thinking about your own goals, the results may feel overwhelming. Relating the filtered funds to your objectives can make the exercise more meaningful.

A screener to analyse mutual funds is a practical tool to bring structure to your mutual fund research. By applying filters, you can quickly compare funds, check how categories differ, and explore options across equity, debt, hybrid, and index funds. It organises available data and presents it in a way that may help you explore different options more easily. 

However, the results are only based on the inputs you select and the past information the tool can access. Outputs of a screener tool should not be treated as forecasts or recommendations. Rather, you may view the screener tool as a starting point, helping you organize the fund universe and gain initial clarity before turning to fact sheets, offer documents, or deeper research.

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The views mentioned above are for information & educational purposes only and do not construe to be any investment, legal or taxation advice. Investors must do their own research before investing. The views expressed in this article are personal in nature and in is no way trying to predict the markets or to time them. Any action taken by you on the basis of the information contained herein is your responsibility alone and Tata Asset Management Pvt. Ltd. will not be liable in any manner for the consequences of such action taken by you. Please consult your Mutual Fund Distributor before investing. The views expressed in this article may not reflect in the scheme portfolios of Tata Mutual Fund. There are no guaranteed or assured returns under any of the scheme of Tata mutual Fund.