Fund Selection & Recommendation Policy
Khushi Wealth Private Limited | AMFI ARN-195636
Objective
The objective of this policy is to ensure investor-first, consistent, and auditable recommendations in line with the SEBI Master Circular for Mutual Funds (2023/24) and AMFI Code of Conduct & Due Diligence Questionnaire (DDQ). Khushi Wealth aims to select suitable products, disclose associated risks and costs transparently, and maintain documentary evidence of all recommendations.
Scope
This policy applies to all employees, EUIN holders, and sub-distributors of Khushi Wealth Private Limited who:
- Recommend or distribute mutual fund schemes (Equity, Hybrid, Debt, Liquid, ELSS, ETFs, SIF-linked).
- Prepare product notes, portfolio reviews, or model portfolios.
- Engage with investors for PMS or SIF products through authorized partners.
Core Principles
- Compliance-First: Only SEBI-registered AMCs and approved schemes are used for transactions via NSE NMF II, BSE STAR MF, MFU, or AMC/RTA portals with EUIN capture.
- Evidence-Based: Scheme recommendations are supported by peer analysis, rolling performance, and risk-adjusted metrics (Sharpe, Sortino, Alpha).
- Transparency: Trail-only commissions are disclosed; no assured or indicative returns are communicated.
- Suitability: Each recommendation aligns with the investor’s risk profile and goal horizon.
- Documentation: Every recommendation is supported by a written rationale, maintained permanently with client records.
Fund Selection Criteria
Khushi Wealth follows a structured approach to shortlist and recommend mutual funds:
- Eligibility:
- Only SEBI-registered AMCs and purchase-enabled schemes.
- Minimum 3-year track record unless justified for new NFOs.
- Screening Parameters:
- Category consistency and rolling 3-year rank in top quartile.
- Risk-adjusted returns above category median.
- Standard deviation ≤ category average + 15%.
- AUM ≥ ₹500 Cr for open-ended schemes (with documented exceptions).
- Portfolio quality checks: diversification, credit profile (AA- and above for debt), liquidity.
- Exclusion Criteria: Funds under SEBI/AMFI observation, restricted, or suspended for transactions are automatically excluded.
Peer Comparison & Evaluation
Each shortlisted fund is compared with at least 6 peers within the same category, evaluating:
- Rolling 1Y/3Y/5Y returns and drawdowns.
- Risk-adjusted ratios (Sharpe, Sortino, Information Ratio).
- Expense ratio and exit load.
- Portfolio diversification, style, duration/credit mix, and fund manager continuity.
All data points are maintained in the Fund Peer Comparison Sheet (FS-PC).
Suitability & Risk Mapping
- Each client’s Risk Profile (Conservative / Moderate / Aggressive) and Goal Horizon (Short <3Y / Medium 3-5Y / Long >5Y) are mapped to suitable categories.
- Products beyond risk tolerance require an Execution-Only Unsuitability Declaration (EO-UD) before execution.
- For hybrid schemes, asset allocation must match the investor’s profile and time horizon.
Documentation
- Product Suitability Note (Form FS-01): Details rationale for each recommendation.
- Peer Comparison Sheet (FS-PC): Maintains analytical data supporting selection.
- Suitability Matrix (FS-SM): Records mapping between risk class and product category.
- Advice Acknowledgment / EO-UD: Signed by investor before execution.
- All documents are preserved permanently in client files (digital and physical).
Review & Monitoring
- Quarterly Review: Re-evaluate approved fund list and monitor performance, expenses, and compliance.
- Annual Committee Review: Director, Compliance Officer, and Research Lead approve revised fund list and document minutes.
- Trigger Events: Scheme underperformance, manager change, credit downgrade, or regulatory action triggers immediate review and investor communication.
Conflict & Revenue Controls
- Only trail commissions are accepted; no upfront payments.
- No AMC-specific sales targets.
- Quarterly Churn & Concentration Review ensures absence of bias or mis-selling.
- Annual Conflict Disclosure Form (FS-A) signed by each EUIN holder.
Record Keeping
- Fund Selection Matrix (FSM)
- Peer Comparison (FS-PC)
- Risk Profile & Recommendation Note
- EO-UD & Advice Acknowledgment
- Annual Review Minutes
Audit & Review Frequency
- Quarterly: Fund selection matrix review and random client file testing.
- Annually: Methodology validation and board approval.
- Ad-hoc: Following SEBI/AMFI circulars or AMC incidents.
Custodian
Compliance Officer – Khushi Wealth Private Limited. Responsible for safe custody and version control of this policy.
Grievance Redressal
Investors may raise grievances via:
Email: admin@khushiinvest.com
Helpline: +91 9265226134
Corporate Office: 104, Maruti Sumiran, Opp. Nandbhumi Party Plot, Anand – V.V.N Road, Anand, Gujarat 388001
Complaints acknowledged within 2 working days and resolved within 30 calendar days. Escalations may be lodged at SEBI SCORES: www.scores.gov.in
Disclaimer
Khushi Wealth Private Limited is an AMFI-registered Mutual Fund Distributor (ARN-195636), AMFI-registered SIF Distributor (ARN-195636), and APMI-registered PMS Distributor (APRN03718). We provide incidental advisory services only. No indicative or assured returns are offered. Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully. For personalized investment advice, consult a SEBI-registered Investment Adviser.