CRISIL (Credit Rating Information Services of India Limited) was founded in 1987. It is the country’s leading credit rating agency. It works as a ranking system, similar to a leaderboard for mutual funds in their peer groups. The CRISIL mutual fund ranking assists you in rapidly checking how efficiently a mutual fund has performed when compared to other funds in the same category. The other funds include mid-cap, large-cap, or debt-fund. If the CRISIL ranking is higher, the past performance is better.
CRISIL implements a dedicated model for mutual funds ranking. It also focuses on infrastructure and debt projects. The corresponding model assesses mutual funds by using various criteria. It plays a prominent role in creating the fund’s credibility and imminent performance potential.
CRISIL mutual fund ranking India assesses funds depending on quantitative and qualitative criteria. In addition to benefitting the investors, the ranking also benefits intermediaries and asset management firms. Note that CRISIL mutual fund ranking India falls under SEBI regulation. Let’s get into more details.
1) CRISIL Mutual Fund Ranking
The CRISIL mutual fund ranking June 2018 offers an all-inclusive evaluation of mutual funds depending on a combination of quantitative and qualitative parameters. The CRISIL mutual fund ranking 2018 assists investors in recognizing the best-performing funds in different categories.
CRISIL mutual fund ranking June 2019 assesses the mutual funds’ performance by ranking the funds on a scale from 1 to 5. The CRISIL rank 1 mutual funds indicate the topmost 10% of funds in the context of performance within their peer group.
The CRISIL mutual fund ranking Sep 2019 evaluates mutual fund schemes across different categories by considering risk, performance, and other quantitative aspects.
The CRISIL mutual fund ranking 2017 has assessed different mutual fund schemes across categories like debt, equity, and hybrid funds. The corresponding rankings were dependent on an all-inclusive analysis of parameters like risk-adjusted yield, portfolio concentration, and portfolio stability.
2) Significance of CRISIL Mutual Fund Ranking
The CRISIL mutual fund ranking is so important to investors because it offers a trustworthy benchmark to assess mutual funds. It assists investors to spot CRISIL top ranked mutual funds in a specific category and then compare the same against their competitors.
This ranking mechanism facilitates investors to make a wise investment decision depending on objective criteria instead of only depending on past performance. It helps investors identify top-performing funds within a specific category and compare them against their peers. CRISIL top ranked mutual funds. This ranking system offers a level playing field, enabling investors to make informed investment decisions based on objective criteria rather than relying solely on past performance or personal interpretations.
If investors take into account CRISIL mutual fund ranking, they can obtain enough insights into past performance, risk management methods, and consistency of different mutual funds. The information presented by this ranking system is quite important in fulfilling investment objectives and risk appetite with the most appropriate mutual fund options.
3) How To Make The Most Of CRISIL Mutual Fund Ranking?
The effective use of CRISIL mutual fund ranking needs a systematic approach. You can follow the below steps to gain the maximum benefit of this ranking system.
Know your investment objectives:
Before discovering this ranking, you must determine your investment objectives, time horizon, and risk tolerance. These aspects will help you concentrate on funds that match your goals.
Choose a category:
You must acquaint yourself with the various categories of mutual funds and the characteristics of each. Typically, CRISIL divides funds into categories like hybrid, equity, and others. Each of these categories comes with its return profile and risk. A proper understanding of the categories will let you make a proper investment decision.
Check the rankings:
After thoroughly understanding fund categories and your investment objectives, you must review the CRISIL mutual fund ranking for specific categories. Focus on the top-ranked funds and also compare the corresponding performances with other funds existing in the same category.
Know the risk factors:
Evaluating the risk linked with each fund is important. You can do that by assessing its risk-adapted returns and portfolio performance. A top-ranked fund offers good returns and also employs effective risk management practices.
Portfolio diversification:
You must spread out your investment across varied asset classes and mutual funds. As a result, the risk decreases and the returns increase. CRISIL mutual fund ranking can help you recognize appropriate funds from various categories to attain diversification.
4) How Does CRISIL Mutual Fund Ranking Affect Your Portfolio?
This ranking can impact your portfolio in the following ways:
Risk management
CRISIL focuses on funds’ volatility. Higher-ranked funds usually have better managed the risk. So, they offer a more stable investment. The CRISIL mutual fund ranking focuses on consistency; they reward funds that perform consistently well instead of those that provide irregularly high returns.
Portfolio diversification
The top-ranking funds existing in various categories (like debt, mid-cap, and large-cap) can help build a diversified portfolio. By incorporating top-ranked funds from different asset classes, you benefit from a balanced risk-return profile.
Trust and credibility
Funds with top rankings usually attract more confidence and trust from investors. The rigorous method implemented in CRISIL rankings indicates that due diligence has already been conducted. So, it saves investors effort and time.
Market trends and investor sentiment
Funds with high CRISIL rankings usually perceive increased inflows. This is because investors consider the rankings which lead to an increased net asset value (NAV) of the fund. The CRISIL rankings can impact fund managers to upkeep or enhance their performance to attain or upkeep a high CRISIL ranking.
Conclusion
It is inevitable to be aware that the CRISIL rating must not be the solitary factor for investment decisions in mutual funds. Investors can consider this rating as a broad filter to assess the quality and health of a mutual fund scheme. The overall analysis must consider the unique details of the portfolio and individual judgment. You can consult BeWealthy to get insights on investment decisions.
FAQs
What is the meaning of CRISIL rank 5 star?
The top 10% of funds get 5 star ratings mutual funds. On the other hand, the bottom 10% gets only 1 star. Note that the CRISIL mutual fund rating evaluates both risk and return. Consequently, it benefits investors with insights into a fund’s potential to provide returns amongst different risks.
Can you rely on CRISIL ranking?
CRISIL is a leading credit rating agency in India, popular for offering reliable and unbiased credit assessments on different financial instruments, including mutual funds. However, investors must make decisions and then rely on the CRISIL mutual fund ranking.
Has RBI approved CRISIL?
RBI has acknowledged CRISIL ratings as an official external credit assessment institution. Note that banks can use these ratings to compute obligatory capital levels for rated credit disclosures.