Three-Lens Framework
A Research-Backed Approach to Selecting Consistent Mutual Fund Performers
Not all mutual funds are built the same. While many investors chase returns, we focus on quality, stability, and growth potential. That’s where Maxiom Wealth’s Three-Lens Framework comes in—designed to help you invest in mutual funds that actually work towards long-term wealth creation. This approach complements our portfolio management services (PMS) and guides our investment advisory for mutual fund portfolios.
What Is the Three-Lens Framework?
Our proprietary research model that screens and selects high-quality mutual funds through three critical checks before recommending any fund.
Equity Portfolio Quality
Are the companies in the fund strong and financially sound?
- Balance sheet strength analysis
- Cash flow sustainability assessment
- Management quality evaluation
- Business model durability check
Bond Credit Quality
Are the debt holdings secure and low-risk?
- Credit rating assessment
- Default risk analysis
- Interest rate sensitivity check
- Duration and maturity profile
Peer Group Ranking
Is the fund consistently performing better than others in its category?
- Historical performance comparison
- Risk-adjusted return evaluation
- Consistency of outperformance
- Volatility assessment
This framework filters out poor-quality funds and focuses only on those with a high probability of delivering stable, long-term results.
Lens 1: Equity Portfolio Quality
Focus: Financial Strength of Underlying Companies
We look under the hood of equity mutual funds to assess the companies they're investing in. This is not a surface-level review—it's a deep dive into balance sheets and business fundamentals.
What we look for:
- Low debt and financially stable balance sheets
- High Return on Equity (ROE), aligned with shareholder interests
- Strong promoter ownership and corporate governance
What we avoid:
- Funds with high exposure to risky or poorly run companies
- Stocks with weak profitability and high leverage
- Funds holding turnaround stories with no real earnings visibility
This is where our Roots & Wings stock-picking philosophy plays a central role.
Lens 2: Bond Credit Quality
Focus: Safety of Debt Holdings in Hybrid or Debt-Oriented Funds
When mutual funds hold bonds, we examine the credit quality of those instruments. We prefer funds with high-grade, less fragile debt structures.
We prioritise:
- AAA-rated sovereign and corporate bonds
- Low-default risk instruments
- Funds that stay away from structured credit or promoter-backed risky debt
This lens ensures that the "safety" part of your mutual fund portfolio is genuinely safe—and not just marketed that way.
Lens 3: Peer Group Ranking
Focus: Performance vs. Peers and Benchmarks
We don't just look at returns in isolation. We measure how a fund performs relative to others in its category, using rolling returns and risk-adjusted metrics.
Our tools include:
- Quartile-based peer ranking
- Rolling return analysis (3, 5, 7 years)
- Monthly rank movement tracking
Red flags:
- Funds consistently ranked in bottom quartiles
- Funds that fail to beat benchmarks over medium to long-term
- High volatility without commensurate returns
This lens helps us avoid underperformers, no matter how popular their names may be.
How We Select Equity Mutual Funds Using the Three Lenses
Here's how the Three-Lens Framework comes together when we evaluate equity mutual funds
Roots: Strong Fundamentals
We look for companies with solid financial foundations
Wings: Growth Visibility
We prioritize businesses with proven growth trajectories
Why This Matters
In the world of mutual funds, chasing past returns often leads to disappointment. A process-based approach—like the Three-Lens Framework—keeps emotions out of investing.
It's how we bring consistency and quality into every portfolio we manage as an AMFI registered, SEBI Registered Portfolio Manager.
Other Filters We Apply
While the Three-Lens Framework forms the core, we also look at additional factors that help us deliver mutual fund recommendations that complement your overall wealth management strategy.
Understanding the Three-Lens Framework
Learn more about our proprietary research model that helps us identify high-quality mutual funds with the greatest potential for stable, long-term performance.
Speak With An ExpertThe Three-Lens Framework is our proprietary research model that screens and selects high-quality mutual funds. It performs three critical checks before recommending any fund: Equity Portfolio Quality (assessing the financial strength of companies in the fund), Bond Credit Quality (evaluating the security of debt holdings), and Peer Group Ranking (analyzing how the fund performs relative to others in its category). This comprehensive approach helps us identify funds with the highest probability of delivering stable, long-term results.
The Equity Portfolio Quality lens examines the underlying companies held in equity mutual funds. We analyze balance sheets and business fundamentals to ensure funds are investing in financially strong, well-managed companies. We specifically look for companies with low debt and stable balance sheets, high Return on Equity (ROE) aligned with shareholder interests, and strong promoter ownership and corporate governance. We avoid funds with high exposure to risky companies, stocks with weak profitability and high leverage, and those holding turnaround stories with poor earnings visibility.
The Bond Credit Quality lens focuses on the safety of debt holdings in hybrid or debt-oriented funds. We examine the credit quality of bonds held by mutual funds, prioritizing those with high-grade, less fragile debt structures. We specifically look for funds holding AAA-rated sovereign and corporate bonds, low-default risk instruments, and those that avoid structured credit or promoter-backed risky debt. This lens ensures that the 'safety' portion of your mutual fund portfolio is genuinely secure, not just marketed that way.
The Peer Group Ranking lens measures how a fund performs relative to others in its category using sophisticated analysis techniques. Rather than looking at returns in isolation, we use quartile-based peer ranking, rolling return analysis (over 3, 5, and 7 years), and monthly rank movement tracking. We identify red flags such as funds consistently ranked in bottom quartiles, those failing to beat benchmarks over medium to long-term periods, and funds with high volatility without commensurate returns. This helps us avoid underperformers regardless of their popularity.
Beyond our core Three-Lens Framework, we apply additional quality filters to ensure comprehensive evaluation. We assess AUM stability, avoiding funds that are too small or face frequent outflows which can impact performance. We evaluate fund manager tenure and track record, recognizing that experience matters significantly in fund management. We also consider portfolio churn rate, preferring funds with lower turnover to reduce cost drag. These additional filters help us deliver mutual fund recommendations that complement your overall wealth management strategy.
A framework-based approach like our Three-Lens Framework removes emotion from investing decisions and provides consistency. Chasing past returns often leads to disappointment as yesterday's winners frequently become tomorrow's underperformers. Our process-based methodology evaluates the fundamental quality of funds and their holdings rather than recent performance, which can be influenced by market trends or luck. As Warren Buffett wisely noted, 'Risk comes from not knowing what you're doing.' Our disciplined framework ensures you're invested in high-quality funds aligned with your risk profile and financial goals, not just recent performers.
