Our SOP & due diligence

A standard operating procedure exists for one reason: so that the same investor gets the same quality of thinking whether they walk in during a bull market or a crash, and whether they invest ₹5,000 a month or ₹5 lakh. What follows is the method we apply.

Step 1 — Risk suitability, before anything else

Nothing is recommended until a risk profile has been completed and recorded. The profile covers income stability, existing liabilities, dependants, insurance cover, emergency reserves, investment horizon, prior market experience and stated tolerance for a fall in value. The output is a risk band, and that band governs which scheme categories are permissible for the investor.

Where a stated tolerance conflicts with the financial reality — a client with no emergency fund asking for a small cap allocation, for instance — the conflict is raised explicitly and the conservative reading is applied.

Step 2 — Category selection before scheme selection

SEBI's categorisation framework defines what each scheme type may hold. We select the category against the horizon and risk band first, because the category decides the great majority of the outcome. Broadly:

These are working defaults for discussion, not rules that override an individual's circumstances.

Step 3 — Scheme shortlisting within the category

Once the category is fixed, schemes within it are assessed on:

• Mandate adherence — does the portfolio actually reflect what the category requires, consistently, or does it drift?
• Rolling returns across cycles — performance measured over rolling periods rather than point-to-point windows that flatter a start date.
• Downside behaviour — how the scheme behaved in falling markets, not only in rising ones.
• Portfolio characteristics — concentration, turnover, credit quality and duration for debt, and how these have changed.
• Expense ratio — compared with category peers, since cost is one of the few certainties.
• Fund house process — stability of the investment team, documented process, and the AMC's conduct record.
• Scheme size — whether the corpus is appropriate for the strategy, particularly in mid and small cap categories.

Step 4 — Portfolio construction

The aim is the smallest number of schemes that covers the required categories. Additional schemes within the same category usually add overlap, not diversification. Each holding is mapped to a named goal so that its purpose is documented from the outset.

Step 5 — Review and rebalancing

Portfolios are reviewed periodically against the plan, not against a peer chart. A review examines whether the goal is still on track, whether the allocation has drifted materially from the intended mix, and whether the investor's own circumstances have changed.

What triggers a scheme change

• Sustained deviation from the category mandate.
• A material change in the AMC's investment process or a significant team change affecting the strategy.
• Structural change in the scheme — merger, category reclassification or a change in fundamental attributes.
• A change in the investor's goal, horizon or risk band that makes the category itself inappropriate.

What does not trigger a change

• A weak quarter, or a year of trailing the category average.
• A different scheme topping a one-year performance table.
• A general market fall affecting the whole category.
• Media commentary, forecasts or tips.

Documentation we maintain

For every client we retain the completed risk profile, the goal mapping (depending on situation only), records of transactions executed, and a record of periodic reviews. EUIN is recorded on every application form alongside our ARN, as AMFI requires, so that the individual who canvassed the business is identifiable.