Mutual Funds Investors - Learning to Use a Mutual Fund Screener, Understanding Scheme Investment Strategy, and Start with SIP

A mutual fund screener is an online tool that allows you to filter mutual funds based on different criteria or factors. Instead of going through hundreds of schemes one by one, the screener narrows the list based on your inputs.

For a better understanding, let’s check out the various factors you can apply:
 

Note: This is only an illustrative list. The filtering options available on mutual fund screeners may vary across platforms.

Firstly, identify your investment objectives and risk tolerance. Usually, it depends on your:

• Income stability

• Financial responsibilities, and

• Comfort with market fluctuations

In such an assessment, investors are usually classified as low, moderate, or high risk-takers. A high-risk investor may tolerate volatility for potentially higher returns, while a low-risk investor prefers relative stability. Such an analysis ensures that the funds you select match your risk appetite. 

Next, follow these steps:

After identifying your investment objective and risk tolerance, use a mutual fund screener to shortlist schemes. You may begin by selecting the fund category (equity, debt, hybrid, etc.) that aligns with your risk level. Then apply filters such as:

• Time horizon

• Expense ratio

• Fund size

Additionally, you can further refine results using “sub-categories” like large-cap, mid-cap, or hybrid funds. The mutual fund screener will now display a list of funds as per your filtering criteria.

You Can Even Apply “Advanced Filters”

Besides basic filtering, you can also narrow down your search using several advanced filters, such as:

• Performance across different time periods

• Returns in rising (bull) and falling (bear) markets

• Sharpe ratio, Standard Deviation, or Maximum Drawdown

• Performance vs. Benchmark vs. Peers

• Category Averages, and more
   

By applying these advanced filters in the mutual fund screener, you can move beyond basic return comparison and evaluate the overall quality of a fund. It allows you to see:

• How scheme has performed over time

• How it behaves in different market conditions, and 

• Whether the returns justify the level of risk taken

Moreover, you can also assess if the fund is outperforming its benchmark and peers, rather than just appearing strong in isolation.

Once you have shortlisted funds using the mutual fund screener, review the investment strategy of each scheme. Note that an Asset Management Company (AMC) launches and manages a mutual fund scheme as per its “investment objective” as defined in its offer document. 

To make a thorough analysis of the shortlisted schemes, you may analyse the following documents:
 

• Key Information Memorandum (KIM)

• Scheme Information Document (SID)

• Scheme Summary Document (SSD)

• Statement of Additional Information (SAI)

These documents are usually available on the official AMC website. Some major parameters you can review in these documents are:
 

From your mutual fund list, remove the schemes that do not match your risk level, investment objective, or preferred asset allocation mix. 

After filtering the schemes using a mutual fund screener and further narrowing the list manually by analysing the AMC investment strategy, you now have a set of funds where you can start an SIP (Systematic Investment Plan).

In this investment method, you invest a fixed amount at regular intervals (e.g. daily, weekly, monthly or quarterly, etc.). This amount is automatically debited from your linked bank account without any manual intervention.

How to Start SIP Online?

To start an SIP online, you must first complete your KYC (Know Your Customer) verification on the official AMC website. This can be done by submitting documents, such as:

• PAN and Aadhaar

• Bank account details (usually along with a cancelled cheque or bank statement)

• Address proof (passport, utility bill, or driving license)

• Passport-sized photograph (digital format)

Post-successful verification, you can start an SIP after confirming the following:

• Mutual fund scheme(s)

• Investment amount (may start from as low as ₹100)

• Investment frequency (daily, weekly, monthly, quarterly, etc.)

• SIP start date

In most cases, you are also required to set up an “e-NACH mandate” for an auto-debit facility.

So now you know what a mutual fund screener is and how you can use it to shortlist mutual fund schemes. If we recap, it is a digital tool that displays different mutual funds, which investors can filter based on criteria such as AUM, expense ratio, investment time horizon, and sub-categories like large-cap, mid-cap, and more.

Once you have a few shortlisted schemes, you can further narrow down the list by reviewing the scheme investment strategy. Such an analysis can be made by referring to documents such as the Key Information Memorandum (KIM), Scheme Information Document (SID), and related disclosures available on the AMC website. 

After this manual shortlisting, you may now have schemes in which you can start an SIP. This process can be initiated online by completing KYC requirements and setting up an e-NACH mandate for auto-debit of the SIP amount.

• An Investor Education and Awareness Initiative by Tata Mutual Fund. 

• To know more about KYC documentation requirements and procedure for change of address, phone number, bank details, etc., please visit: https://www.tatamutualfund.com/deshkarenivesh

• Please deal only with registered Mutual Funds, details of which can be verified on the SEBI website under ‘Intermediaries / Market infrastructure institutions.’

• All complaints regarding Tata Mutual Fund may be directed to service@tataamc.com and/or https://scores.sebi.gov.in/ (SEBI SCORES portal) and/or https://smartodr.in/login

• Nomination is advisable for all folios opened by an individual, especially with sole holding, as it facilitates an easy transmission process. 

• This communication is a part of the investor education and awareness initiative of Tata Mutual Fund.