This category is all about picking the right stocks, according to Gupta, who adds that spending time formulating an investment strategy is also crucial.
Factors like analysis of past performance, accounting for the pricing and the robustness of the business model are measures that can be used.
The second measure is the construction of what comprises the schemes, like cash calls and exposure, among others.
Liquidity is a condition that will help one’s account with downside protection.
“When things go wrong, you want some protection, as mistakes in mid-caps can be very costly,” she said.
The rolling returns of the schemes in the last five years are a meter for consistency in performance and considering a longer period would help filter the best of the lot.
Finally, the risk that the investor is taking would be understood and measured with tools like the Sharpe ratio. The performance of the scheme while the broader markets were not doing well will help understand the downside protection of the schemes.