PhonePe Wealth Unveils CRISP: A Prudent Decision Tool for Mutual Fund Investment
PhonePe Wealth has unveiled CRISP, an internet-based application to assist investors in making prudent choices while investing in mutual funds. With the investment in mutual funds growing, the number of individual investors also swelled exponentially to 53 million in December 2024 from 20 million in December 2019, the Association of Mutual Funds in India (AMFI) data revealed.
But while the growth did occur, even now investors are finding it tough to choose the right funds. CRISP, which stands for Consistency, Risk, and Investment Style of the Portfolio, tries to ease fund selection by offering a structured framework that does more than just look at historic performances.
Historically, individual investors, particularly those employing wealth technology platforms, have based themselves solely on past point-to-point performance numbers, which in many cases results in less-than-ideal investment decisions. By converting performance, risk, and portfolio information into meaning-rich facts, CRISP offers an advanced method of fund selection.
The industry of mutual funds has seen a surge in growth as a result of more investor awareness campaigns and democratization of investing through wealth tech platforms. To benefit from this trend, the newly introduced tool aims to assist investors by integrating cutting-edge research and technology-based solutions to enable them to embrace fundamental investment principles and navigate their wealth creation journey more effectively.
CRISP AnalyZes Mutual Funds on Three Significant Parameters
1. Consistency of Performance: The tool tests a fund’s consistency over five years based on rolling returns. On the basis of consistent performance compared to peers, funds are ranked ‘High,’ ‘Medium,’ or ‘Low.’ This ranking assists investors in identifying those funds that consistently repeat success and not those who do well occasionally.
2. Relative Risk against Peers: CRISP determines the risk level of a fund compared to similar funds and ranks it as ‘Within acceptable range’ or ‘Too High.’ This tool protects investors from excessive risk funds.
3. Investment Style or Factor Analysis: The tool examines exposure to multiple factors of investment such as value, quality, and momentum over five years. The tool grades each factor as ‘High,’ ‘Medium,’ or ‘Low’ so that investors may know about the style of management of the fund as well as assist in diversification of the portfolio.
CRISP is now on the PhonePe platform and will be combined with Share Market, is the company’s stockbroking platform, making it easier for investors to access a data-driven way of selecting mutual funds.
