PhonePe Wealth launches CRISP, online tool to select mutual funds

CRISP simplifies investing decisions by converting performance, risk and portfolio data of mutual funds into actionable insights, says company

PhonePe Wealth has launched CRISP, a digital tool that will help investors make “well-informed decisions” in selecting mutual funds, it said on Wednesday.

 

Mutual fund investments continue to rise, with the number of unique investors growing from 20 million in December 2019 to 53 million in December 2024, according to data from the Association of Mutual Funds in India (AMFI). Despite the surge, selecting the right funds remains a challenge for many investors.

 

CRISP, short for consistency, risk and investment style of the portfolio, addresses this challenge by offering a “comprehensive framework” beyond merely analysing past returns. Retail investors, particularly those using wealth technology platforms, have traditionally relied on historical point-to-point performance metrics, often leading to suboptimal investment decisions. CRISP simplifies this process by converting performance, risk, and portfolio data into actionable insights, said PhonePe Wealth.

 

“The mutual fund industry is experiencing significant growth due to industry’s investor awareness initiatives and democratisation of mutual fund investing by wealthtech platforms. At PhonePe Wealth, our focus is on supporting investors on our platform through innovative tools like CRISP,” said Nilesh D Naik, head of investment products, Share.Market (PhonePe Wealth).

 

“We are committed to developing research and technology-driven solutions that help investors embrace core investing principles and prudently navigate their wealth creation journey,” he said.

 

CRISP evaluates mutual funds based on three key parameters:

 

Consistency in performance: The tool assesses a fund’s performance consistency over a five-year period using rolling returns. Funds are categorized as 'High,' 'Medium,' or 'Low' based on their sustained performance relative to their peers. This approach helps investors identify funds that consistently outperform rather than those with sporadic success.

 

Relative risk vs. peers: CRISP classifies a fund’s risk profile compared to its peer group, categorising it as either 'Within acceptable range' or 'Too High.' This helps investors steer clear of funds that take extreme risks.

 

Investment style or factor analysis: The tool evaluates a fund’s exposure to different investment factors such as value, quality, and momentum over a five-year period. Each factor is assigned a classification of 'high,' 'medium,' or 'low,' offering investors clarity on the fund’s management style and assisting in portfolio diversification.

 

CRISP is available on the PhonePe platform and will be integrated with Share.Market, the company’s stock broking platform.