Capital Protection Oriented Fund Ratings

In 2006, we assigned the country's first rating on a Capital Protection-Oriented Fund (CPF). The ratings on CPFs indicate the degree of certainty regarding timely payment of the face value of the units to unit holders on maturity of the scheme. The rating on CPFs is on the structured obligation (so) scale. The rating is not a comment on the scheme's net asset value (NAV) in relation to the face value of the scheme's units at any time before their redemption.

 

CPF ratings are monitored to analyse the probability of the following:

  • The portfolio value falling below the initially contracted principal value
  • Investors getting their money back in full

Benefits of CPF:

  • Provides investors with an independent opinion on the likelihood of timely repayment of the initial investment in the rated instrument on maturity
  • Allows investors to participate in upturns in the equity market without suffering erosion in value of the investment in case of a downturn

Credit Quality Rating

In 1996, we pioneered the concept of credit quality ratings for the money market and debt funds in the domestic market. Our Credit Quality Ratings are an opinion on the expected default probability of securities in the fund portfolio. These ratings are assigned only to funds that invest entirely or almost entirely in debt.

 

The rating reflects the level of protection that a fund's portfolio holdings provide against losses from credit defaults. To maintain the rating at all times, the fund has to maintain a certain level of credit quality of the portfolio.

 

Long-term ratings are assigned to open-ended funds (funds that do not have a defined maturity date) and to funds that have an original contracted maturity of more than one year. Short-term ratings are assigned to funds that have an original contracted maturity of one year or less.

Fund Management Capability Ratings

Our CRISIL continues to serve the funds industry – including mutual funds and alternative investment funds – better by offering meaningful and effective products. CRISIL provides yet another path-breaking service called Fund Management Capability Ratings. These ratings will provide investors with a powerful tool concerning investment processes and management practices for a particular scheme. CRISIL Fund Management Capability Rating is a scheme level rating to assess the management capability and quality of investment processes in relation to the scheme’s objectives. The emphasis is on the quality of the investment management team, investment strategies, and processes to determine the scheme’s ability to fulfil investment objectives consistently. A high score on these parameters will have a strong linkage with long-term performance of the scheme.

 

Rating Methodology

CRISIL’s assessment of the scheme being rated covers two broad parameters:

  • Fund Management Assessment
  • Performance Assessment
  •  

    Fund Management Assessment

    CRISIL’s Fund Management Capability Rating looks at the following qualitative parameters:

  • Organisation structure
  • Investment team
  • Investment decision-making process and discipline
  • Client communication, transparency and disclosure
  •  

    Performance Assessment

    CRISIL will assess the scheme’s past performance (if any) over a sufficiently long time horizon as well as the performance of the other existing and past schemes managed by the investment team to assess their performance track record vis-à-vis the performance of the benchmarks and peer schemes.

     

Rating Scales

Rating scales for our Fund Rating instruments are as following:
 

Credit Quality Ratings

Long-Term Ratings

 

Rating Description
CRISIL AAAmfs
Schemes with this rating are considered to have the highest degree of safety regarding timely receipt of payments from the investments that they have made.
CRISIL AAmfs
Schemes with this rating are considered to have the high degree of safety regarding timely receipt of payments from the investments that they have made.
CRISIL Amfs
Schemes with this rating are considered to have the adequate degree of safety regarding timely receipt of payments from the investments that they have made.
CRISIL BBBmfs
Schemes with this rating are considered to have the moderate degree of safety regarding timely receipt of payments from the investments that they have made.
CRISIL BBmfs Schemes with this rating are considered to have moderate risk of default regarding timely receipt of payments from the investments that they have made.
CRISIL Bmfs
Schemes with this rating are considered to have high risk of default regarding timely receipt of payments from the investments that they have made.
CRISIL Cmfs
Schemes with this rating are considered to have very high risk of default regarding timely receipt of payments from the investments that they have made.

Note

  • The ratings from 'CRISIL AAmfs' to 'CRISIL Cmfs' may be modified by the addition of a '+' (plus) or '-' (minus) sign to reflect comparative standing within the category.

Short-Term Ratings

 

Rating Description
CRISIL A1mfs
Schemes with this rating are considered to have very strong degree of safety regarding timely receipt of payments from the investments that they have made.
CRISIL A2mfs
Schemes with this rating are considered to have strong degree of safety regarding timely receipt of payments from the investments that they have made.
CRISIL A3mfs
Schemes with this rating are considered to have moderate degree of safety regarding timely receipt of payments from the investments that they have made.
CRISIL A4mfs
Schemes with this rating are considered to have minimal degree of safety regarding timely receipt of payments from the investments that they have made.

 

Note 

  • The ratings from 'CRISIL A1mfs' to 'CRISIL A4mfs' may be modified by the addition of a '+' (plus) sign to reflect comparative standing within the category.

Fund Management Capability

Fund Management Capability

 

Rating

Description
CRISIL Fund Management Capability Level 1 Schemes rated CRISIL Fund Management Capability Level - 1 are judged to possess Highest standards in fund management capability and investment processes
CRISIL Fund Management Capability Level 2
Schemes rated CRISIL Fund Management Capability Level - 2 are judged to possess High standards in fund management capability and investment processes
CRISIL Fund Management Capability Level 3
Schemes rated CRISIL Fund Management Capability Level - 3 are judged to possess Above-average standards in fund management capability and investment processes
CRISIL Fund Management Capability Level 4
Schemes rated CRISIL Fund Management Capability Level - 4 are judged to possess Average standards in fund management capability and investment processes
CRISIL Fund Management Capability Level 5
Schemes rated CRISIL Fund Management Capability Level - 5 are judged to possess Poor standards in fund management capability and investment processes

 

Rating List

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Questions?

  • To get a copy of rating reports, please email us at:
    crisilratingdesk@crisil.com

  • For analytical queries, please email us at:
    ratingsinvestordesk@crisil.com

  • For any other information,  please call or email us at:
    +1800 267 1301
    crisilratingdesk@crisil.com