Best Way to Use a Screener for Mutual Funds: A Practical Guide for Smart Investors

 

When you start exploring mutual funds, the number of schemes, categories, and sub-categories can feel overwhelming. Equity, debt, hybrid, large-cap, small-cap, solution-oriented—the list goes on.

And while diversification is important, most investors don’t need more than a limited number of well-chosen schemes in their portfolio.

So how do you identify the right funds without getting lost in endless comparisons?

This is where a mutual fund screener becomes a powerful ally. It helps you filter, compare, and shortlist mutual funds efficiently, using data-backed parameters.

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What Is a Mutual Fund Screener?

A mutual fund screener is an online tool designed to help investors evaluate and compare mutual funds across various metrics such as:

• Historical returns
• Risk levels
• Performance against benchmarks
• Portfolio concentration
• Expense ratio
• Top holdings and sectors
• Category averages

Simply choose the fund category (equity, debt, hybrid, etc.) and the sub-category (large-cap, mid-cap, multi-cap, value, etc.) to begin filtering.

Some modern screeners even allow you to:

• Enter your financial goals
• Define them as short-, medium-, or long-term
• Select your risk tolerance

Based on these preferences, the screener recommends suitable schemes from thousands available in the market.

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How to Use a Mutual Fund Screener Effectively

Here is a step-by-step approach to make the most of a screener:

1. Know Your Risk Appetite

Be clear whether you fall into one of these categories:

• High-risk taker
• Moderate-risk taker
• Low-risk taker
• Risk-averse

Your risk profile influences the type of funds you select.

2. Identify Your Investment Objective

Decide what you want your investment to achieve:

• Capital appreciation (growth)
• Regular income
• Capital preservation

This also depends on your financial goals.

3. Define Your Time Horizon

Your goals can be:

• Short-term (1–3 years)
• Medium-term (3–5 years)
• Long-term (5+ years)

Your time horizon helps determine whether equity, debt, or hybrid funds suit you better.

4. Select the Appropriate Fund Type

After understanding the above three factors, choose among:

• Equity Funds
• Debt Funds
• Hybrid Funds
• Gold Funds
• Solution-oriented funds

Each serves a different purpose.

5. Filter Among Sub-Categories

For example:

If you want long-term growth, have a high risk appetite, and prefer equity, you may compare:

• Large-cap funds
• Mid-cap funds
• Flexi-cap funds
• Value funds
• Aggressive hybrid funds

The screener then shows NAV, ratings, long-term performance, and more.

6. Study the Factsheets

After shortlisting 3–5 schemes:

• Check fund objectives
• Investment strategy
• Portfolio composition (top 10 holdings, sector allocation)
• Expense ratio
• Fund manager’s track record

7. Perform Deeper Analysis Using Screener Filters

Go deeper with:

• Risk ratios (Sharpe, Sortino)
• Bull and bear market performance
• Consistency across multiple time periods
• Portfolio turnover
• Fund size (AUM)

This helps separate average funds from consistently reliable ones.

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What You Should Keep in Mind When Comparing Funds

#1 Compare Only Within the Same Category

Never compare:

• Equity with debt
• Large-cap with mid-cap
• Small-cap with multi-cap

The investment mandate and risk levels differ significantly.

#2 Avoid Comparing NAVs

NAV is simply the per-unit value of the fund’s portfolio.

A low NAV doesn’t mean higher potential returns, and a high NAV doesn’t mean the fund is expensive.

Unlike stock prices, NAV is not driven by demand and supply.

#3 Don’t Over-rely on Past Performance

Past returns can give insights, but they do not guarantee future outcomes.

A top performer today might underperform tomorrow, and vice versa.

Check the risk taken to generate those returns.

Consistency matters more than flashy past numbers.

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Conclusion

In a world where data plays a critical role in decision-making, a mutual fund screener can be an invaluable tool. It allows you to:

✔ Filter funds efficiently

✔ Compare schemes on meaningful parameters

✔ Shortlist options that match your goals and risk profile

However, remember that a screener provides indicative suggestions, not final recommendations.

Always dig deeper into the factsheet and scheme documents, and consult a SEBI-registered investment adviser if you feel uncertain.

Once your portfolio is set, review and rebalance it periodically. This ensures your investments continue to align with your evolving goals and market dynamics.

Be thoughtful, stay informed, and invest with clarity.

Happy Investing!