groww options rating and retuns filter.
groww app, mutual fund filter option rating and return , exaplin with good exmaple? fund size 1,2,5,10 of 1000cr with eamples which is good, ? risk with 6 modes , low to very hight?
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On the Groww app, you can filter mutual funds based on several criteria, including ratings, returns, fund size, and risk levels. Let me explain how you can use these filters, along with examples, to make better investment choices.
1. Fund Rating
Mutual funds are often rated by independent agencies like CRISIL, Morningstar, or Groww itself. These ratings help investors understand the historical performance and risk profile of a fund.
Example:
- A 5-star rating indicates the fund has shown consistent strong performance compared to its peers over a long period.
- A 4-star rating is good but might not perform as well as a 5-star rated fund.
- A 1-star rating suggests poor historical performance relative to peers.
How to Use:
For a new investor, it’s wise to look at funds with higher ratings (3-5 stars) as they typically have better management and consistent returns.
2. Returns
Groww allows you to filter funds based on their past performance in terms of returns. The typical filters are:
- 1-year return
- 3-year return
- 5-year return
- Since inception return
Example: If you are investing with a 3-year horizon, you may want to filter mutual funds based on their 3-year returns. If a fund has consistently returned 15% per annum over the last 3 years, it might be a solid option compared to a fund that only returned 5%.
How to Use:
- Short-term (1-3 years): Look for funds that have given decent returns in the recent 1-3 year period.
- Long-term (5+ years): Funds that have consistently performed well over 5 or more years are often safer bets.
3. Fund Size
Fund size refers to the total amount of assets under management (AUM) of a mutual fund. Larger funds (AUM of ₹1000 crore or more) generally have more stability, while smaller funds can offer higher growth potential but come with more risk.
Fund Size Examples:
- Small Fund (₹100-500 crore AUM): These funds might be more flexible and nimble but could face liquidity problems. For instance, a fund with an AUM of ₹200 crore could potentially give higher returns but could be more volatile.
- Medium Fund (₹500 crore to ₹1000 crore AUM): Funds in this range typically balance growth and stability.
- Large Fund (₹1000 crore AUM and above): Funds with AUM of ₹1000 crore or more are more stable but may not give extremely high returns as their portfolio becomes harder to manage. However, they usually provide safer investments.
Example:
- HDFC Flexi Cap Fund has an AUM of ₹10,000 crore, meaning it’s a very large fund. While it may not provide explosive growth like a smaller fund, it offers stability and consistency.
- Motilal Oswal Midcap 30 Fund has an AUM of ₹2,000 crore, meaning it's medium-sized and more flexible in managing its investments.
How to Use:
- Small Funds (₹100-500 crore): Ideal for higher risk and aggressive growth.
- Large Funds (₹1000 crore and above): Safer and more stable, with moderate returns.
4. Risk Level
Funds on Groww are also categorized by risk levels. They use a scale from low to very high. This helps you decide how much risk you are willing to take.
Risk Modes:
- Low Risk: Debt funds or Liquid funds. Example: HDFC Short Term Debt Fund.
- Moderate Risk: Balanced or hybrid funds. Example: ICICI Prudential Equity & Debt Fund.
- High Risk: Equity funds focused on mid-cap or small-cap stocks. Example: Franklin India Smaller Companies Fund.
- Very High Risk: Sectoral or thematic equity funds, or funds focused on emerging markets or stocks with high volatility. Example: DSP BlackRock Small Cap Fund.
How to Use:
- Low risk: If you are risk-averse and want steady, lower returns with minimal fluctuations.
- Moderate risk: If you're looking for a balance of growth and safety.
- High/Very High Risk: For aggressive investors seeking high returns, with the understanding that they may face larger short-term volatility.
Example of Mutual Funds with Different Risk Levels:
1. Low Risk:
- ICICI Prudential Liquid Fund (Direct Growth)
- Fund Size: ₹17,000 crore (Large Fund)
- Risk Level: Low
- Returns: 5-6% per annum over 3 years
This is ideal for conservative investors seeking stability.
2. Moderate Risk:
- HDFC Hybrid Equity Fund (Direct Growth)
- Fund Size: ₹12,000 crore (Large Fund)
- Risk Level: Moderate
- Returns: 10-12% per annum over 3 years
This fund invests in a mix of debt and equity, balancing safety and growth.
3. High Risk:
- Nippon India Small Cap Fund (Direct Growth)
- Fund Size: ₹1,200 crore (Medium Fund)
- Risk Level: High
- Returns: 15-20% per annum over 3 years
This fund is more volatile but has the potential for higher returns.
4. Very High Risk:
- SBI Small Cap Fund (Direct Growth)
- Fund Size: ₹5,500 crore (Large Fund)
- Risk Level: Very High
- Returns: 20%+ per annum over 3 years
This fund invests heavily in small-cap stocks, making it ideal for investors willing to take high risks.
Summary:
Fund Size:
- Small funds (₹100-500 crore) offer higher growth potential but more volatility.
- Large funds (₹1000 crore and above) offer stability but lower growth potential.
Risk Level:
- Low Risk: Ideal for conservative investors.
- Moderate Risk: Balanced approach.
- High/Very High Risk: For aggressive investors seeking higher returns, willing to tolerate more volatility.
Returns & Rating:
- Look for funds with good ratings (4-5 stars) and consistent returns in the long term. Compare their performance with benchmarks.
In conclusion, on the Groww app, you can filter funds by risk level, returns, fund size, and ratings to make an informed decision based on your investment goals, whether you're looking for stability or high growth potential. Always consider your risk tolerance before investing.