How to Choose a Mutual Fund AMC You Can Trust

"I invested Rs 15 lakh in what seemed like a safe debt fund. One morning, the AMC announced they were shutting down six schemes. I couldn't access my money for over a year."

This isn't a hypothetical scenario. In April 2020, Franklin Templeton wound up six debt schemes, locking approximately Rs 25,856 crore of investor money.(RFMLR)

Many NRIs who had parked their India savings in these "safe" funds found themselves trapped.

At Belong, we've spoken with many NRIs who learned this lesson the hard way. The AMC you choose matters as much as the fund you pick. A prestigious brand doesn't guarantee safety. High past returns don't mean solid governance.

This guide covers everything you need to evaluate before trusting an AMC with your money: governance structure, track record analysis, fund manager stability, crisis management history, and NRI-specific considerations.

By the end, you'll know exactly how to separate trustworthy AMCs from risky ones.

Why the AMC Matters More Than You Think

Most investors focus on fund returns. They compare NAV, look at star ratings, and check last year's performance. The AMC behind the fund rarely gets a second glance.

This is a mistake.

The AMC decides which securities go into your fund. They hire and retain fund managers. They set risk management policies. They handle crises when markets crash. They decide whether to protect investor interests or their own business.

A well-governed AMC with average funds will likely protect your wealth better than a poorly governed AMC with star-rated funds.

What Happened at Franklin Templeton

Franklin Templeton wasn't some unknown player. It was one of India's largest AMCs, managing over Rs 1.14 lakh crore. Yet in April 2020, they shut six debt schemes without warning.

The real issue wasn't COVID. SEBI's statement was blunt: "Some mutual fund schemes seem to have chosen to have high concentrations of high risk, unlisted, opaque, bespoke, structured debt securities with low credit ratings." (RFMLR)

In other words, the AMC chased higher returns by taking excessive risks that investors didn't fully understand.

The silver lining: investors eventually received 109.25% of their original investment back. (Franklin Templeton) But it took years, legal battles, and significant stress.

👉 Tip: Past returns tell you what happened. Governance tells you what will happen when things go wrong. Focus on both.

Understanding AMC Structure in India

Before evaluating specific AMCs, understand how they're structured. This helps you identify where governance can fail.

The Three-Tier Structure

SEBI regulations categorise mutual funds as Public Trusts under the Indian Trust Act of 1882. This structure involves three key players: (Bajaj Finserv)

Sponsor: The entity that establishes the fund. Usually a bank, NBFC, or financial services company. They're responsible for setting up the mutual fund, listing it with SEBI, and ensuring resource management.

Trustee: Accountable to investors. Ensures the mutual fund complies with regulations. The trustee board must be independent from the AMC and monitor all activities.

Asset Management Company (AMC): Manages day-to-day operations. Hires fund managers, makes investment decisions, handles transactions, and reports to trustees.

Why This Structure Matters

The separation between sponsor, trustee, and AMC creates checks and balances. Trustees are supposed to protect investor interests even if it conflicts with AMC profitability.

When this structure works well, trustees catch problems early. When it fails, you get situations like Franklin Templeton.

Questions to ask:

Who is the sponsor? What's their financial strength?
Is the trustee board truly independent?
Has the trustee board ever publicly disagreed with the AMC?

How to Evaluate AMC Governance

Good governance isn't just about compliance. It's about culture, transparency, and alignment with investor interests.

1. Check Regulatory Standing

Every AMC must be registered with SEBI and follow AMFI guidelines. Start here:

SEBI registration: Verify on SEBI's website
AMFI membership: Check on AMFI's portal
Past regulatory actions: Search for SEBI orders against the AMC

Any AMC with repeated regulatory violations is a red flag, regardless of returns.

2. Review "Skin in the Game" Compliance

After the Franklin Templeton crisis, SEBI mandated that key AMC employees invest a percentage of their salary in the schemes they manage. This is called "skin in the game." (NLIU CBCL)

Effective April 2025, SEBI updated these rules with slab-based investment requirements. AMCs must now disclose aggregate employee investments in each scheme quarterly. (Probe42)

Why this matters: If fund managers have their own money in the fund, they're less likely to take reckless risks.

Check factsheets and disclosures for employee investment information. AMCs that prominently display this demonstrate confidence in their own products.

3. Examine Disclosure Quality

Trustworthy AMCs are transparent even when it's uncomfortable. Look for:

Monthly factsheets: Detailed portfolio breakdowns, not just top holdings
Risk disclosures: Clear explanation of what could go wrong
Cost breakdowns: TER components explained
Voting disclosures: How the AMC voted on corporate governance issues in portfolio companies

Poor disclosure quality often indicates poor governance culture.

👉 Tip: Compare the factsheets of two AMCs for the same fund category. The one with more detailed disclosures usually has better governance practices.

Track Record: What to Look For (And What to Ignore)

Track record isn't just about returns. It's about consistency, crisis management, and process.

1. Long-Term Consistency Over Short-Term Stars

A fund that delivered 50% last year might crash 30% next year. Look for:

Rolling returns over 5-10 years: More reliable than point-to-point returns
Performance across market cycles: Did the fund hold up during 2020, 2022 corrections?
Consistency across similar schemes: If the large cap fund does well but small cap struggles, is it the AMC or just market conditions?

Use tools like Value Research or Morningstar India to compare rolling returns across AMCs.

2. Crisis Management History

How did the AMC behave during difficult times? This reveals true character.

Questions to research:

During March 2020 crash, did they reassure investors or go silent?
Have they ever frozen redemptions or created side pockets?
How did they handle the IL\&FS, DHFL, or Yes Bank crises if their funds were exposed?

AMCs that communicated proactively and protected investors during crises deserve trust. Those that went silent or prioritized their own interests don't.

3. Side Pocket and Segregated Portfolio History

SEBI allows AMCs to create "side pockets" for distressed assets. This protects existing investors from forced selling.

Check if the AMC has ever created side pockets. If yes:

Was it done proactively or only when forced?
How did they communicate with investors?
What was the eventual recovery?

Franklin Templeton had created side pockets for Yes Bank and Vodafone Idea bonds before the eventual shutdown. This should have been a warning sign for investors to review their exposure. (The Mutual Fund Guide)

Fund Manager Stability and Expertise

The fund manager makes daily investment decisions. Their skill, experience, and stability directly impact your returns.

1. Experience and Track Record

Look for fund managers with:

10+ years of industry experience: They've seen multiple market cycles
Consistent performance across funds they've managed: Not just one lucky fund
Clear investment philosophy: Can they explain their approach?

Top fund managers like Sankaran Naren (ICICI Prudential), R. Srinivasan (SBI), and Prashant Jain have decades of experience and clear investment styles. (Tickertape)

2. Manager Tenure and Turnover

Frequent fund manager changes indicate instability. Check:

How long has the current manager been with this fund?
Has the AMC had multiple manager changes in the last 3 years?
Did performance change significantly after manager transitions?

A fund with a new manager every 18 months doesn't have a stable investment process.

3. Team vs Individual Dependence

Some AMCs have robust research teams where fund managers are supported by analysts. Others depend heavily on individual star managers.

Team-based approaches are more sustainable. If one person leaves, the process continues. Star-manager dependent AMCs carry key-person risk.

👉 Tip: Check the fund's factsheet for "Fund Manager" section. If it lists just one name with no mention of research team, ask yourself: what happens if they leave?

Size and Stability: Does AUM Matter?

India currently has 49 registered AMCs as of December 2025. (Shoonya) Their size varies dramatically.

Top 10 AMCs by AUM (Q3 2025)

Rank	AMC	Approx AUM (Rs Lakh Crore)
1	SBI Mutual Fund	11.99
2	ICICI Prudential	9.50+
3	HDFC Mutual Fund	7.50+
4	Nippon India	5.50+
5	Kotak Mahindra	5.00+
6	Aditya Birla Sun Life	4.00+
7	Axis Mutual Fund	3.50+
8	UTI Mutual Fund	3.20+
9	Tata Mutual Fund	2.00+
10	DSP Mutual Fund	2.00+

Source: Shoonya

Advantages of Larger AMCs

Stability: Larger AMCs have more resources to weather market downturns
Research capability: More analysts, better coverage
Regulatory compliance: More robust systems and processes
Liquidity management: Better ability to handle large redemptions

When Smaller AMCs Make Sense

Specialized strategies: Niche focus areas where size would be a disadvantage
Newer approaches: Some smaller AMCs offer innovative products larger ones don't
Personal service: Smaller AMCs sometimes offer better investor communication

Don't automatically dismiss smaller AMCs, but apply higher scrutiny to their governance and financial stability.

The sponsor's strength and reputation matter. If the AMC faces financial stress, a strong sponsor can provide support.

Types of Sponsors

Bank-Backed AMCs: SBI MF, HDFC MF, ICICI Prudential, Kotak MF, Axis MF

Advantage: Parent bank's financial strength and distribution network
Consideration: Potential conflicts of interest with bank products

Financial Conglomerate-Backed: Aditya Birla Sun Life, Tata MF, Reliance/Nippon

Advantage: Diversified parent with deep pockets
Consideration: Governance quality varies by group

Foreign-Backed: Franklin Templeton, DSP (formerly DSP BlackRock), Mirae Asset

Advantage: Global expertise and processes
Consideration: India may not be their priority market

Independent/New Age: PPFAS, Quantum, Groww, Zerodha

Advantage: Often more investor-aligned, lower conflicts
Consideration: Less financial cushion during stress

Questions About Sponsors

What's the sponsor's financial health? Check their balance sheet.
Has the sponsor ever faced regulatory action in any business?
Does the sponsor have a history of supporting group companies during stress?

NRI-Specific Considerations

As an NRI, you have additional factors to evaluate when choosing an AMC.

1. Does the AMC Accept NRIs from Your Country?

Not all AMCs accept investments from US and Canada NRIs due to FATCA compliance. Approximately 20-25 of India's 45+ AMCs accept US/Canada NRIs, but policies change. (Motilal Oswal)

AMCs commonly accepting US/Canada NRIs include:

SBI Mutual Fund
ICICI Prudential
UTI Mutual Fund
Aditya Birla Sun Life
Tata Mutual Fund
Nippon India
Franklin Templeton

Always verify directly with the AMC before investing, as policies update frequently.

2. Online vs Offline Access

Some AMCs require physical presence in India for NRI onboarding. Others offer fully digital processes.

For UAE-based NRIs, most major AMCs offer online access. For US/Canada NRIs, the situation is more complex. Some require offline forms, self-declarations, or even physical presence. (Prime Wealth)

👉 Tip: If you're in the US or Canada, GIFT City investments offer a simpler compliance path. GIFT City operates as an offshore financial center with easier FATCA requirements.

3. Customer Service for Overseas Investors

Test the AMC's responsiveness before investing:

Send an email query. How long does it take to get a useful response?
Call their NRI helpline. Is it accessible from overseas?
Check if they have relationship managers for NRI investors

Poor customer service becomes a nightmare when you need to urgently redeem or update documents.

4. Repatriation Process

Understand how the AMC handles repatriation:

Do they credit redemptions to NRE or NRO accounts?
What documentation do they require?
How long does the process take?

AMCs with streamlined NRI processes save you significant hassle when you eventually need your money.

Red Flags: When to Avoid an AMC

Watch for these warning signs:

Governance Red Flags

Frequent regulatory actions or SEBI warnings
Opaque disclosures in factsheets
Trustee board dominated by sponsor nominees
Key personnel with past regulatory issues

Performance Red Flags

Consistently underperforming benchmarks across multiple schemes
Returns too good to be true (especially in debt funds)
High concentration in risky or illiquid securities
Frequent side pockets or credit events

Operational Red Flags

Delayed NAV declarations
Errors in account statements
Poor customer service responsiveness
Website frequently down or outdated

NRI-Specific Red Flags

Unclear or changing policies on NRI investments
Excessive documentation requirements
No dedicated NRI support
Difficulties in redemption or repatriation

A Framework for Choosing Your AMC

Here's a practical 7-step process:

Step 1: Define Your Requirements

Which countries do you need acceptance from?
Do you need online or offline access?
What fund categories are you interested in?
How important is customer service?

Step 2: Create a Shortlist

Based on your requirements, create a list of 5-7 AMCs. Start with larger, established players unless you have specific reasons for smaller ones.

Step 3: Verify Regulatory Standing

Check SEBI registration and any past regulatory actions for each AMC on your list.

Step 4: Evaluate Governance

Review disclosures, trustee independence, and skin-in-the-game compliance. Eliminate AMCs with poor transparency.

Step 5: Analyze Track Record

Look at rolling returns, crisis management history, and consistency across schemes. Focus on the last 7-10 years.

Step 6: Assess Fund Manager Stability

Check tenure, experience, and turnover rates. Prefer AMCs with stable, experienced teams.

Step 7: Test Customer Service

Send a query, call the helpline, test the website. Eliminate AMCs that don't meet your service expectations.

The Case for Diversifying Across AMCs

Even after careful selection, don't put all your money with one AMC. The Franklin Templeton crisis showed that even large, reputed AMCs can fail.

A reasonable approach:

Core holdings: 2-3 large, well-governed AMCs
Satellite holdings: 1-2 smaller or specialized AMCs for specific strategies
Maximum per AMC: No more than 40-50% of your total mutual fund investments

This way, an issue at one AMC doesn't devastate your entire portfolio.

The GIFT City Alternative

For NRIs, especially those in the UAE, GIFT City offers an alternative worth considering.

Why GIFT City AMCs Are Different

GIFT City operates under IFSCA (International Financial Services Centre Authority) regulations. AMCs operating here cater specifically to international investors.

Benefits for NRIs:

No capital gains tax for NRIs/OCIs
USD-denominated options avoid currency conversion
Simplified compliance compared to domestic mutual funds
Designed for international investors from the ground up

Funds like Tata India Dynamic Equity Fund and DSP Global Equity Fund are available through GIFT City platforms.

Explore options using Belong's GIFT City Mutual Funds Explorer.

AMC Evaluation Checklist

Use this checklist before investing with any AMC:

Governance

[ ] SEBI registered and AMFI member
[ ] No major regulatory actions in last 5 years
[ ] Transparent disclosures in factsheets
[ ] Skin-in-the-game compliance visible
[ ] Independent trustee board

Track Record

[ ] 10+ years operating history
[ ] Consistent performance across market cycles
[ ] No major scheme closures or freezes
[ ] Clear communication during past crises

Fund Management

[ ] Experienced fund managers (10+ years)
[ ] Low manager turnover
[ ] Team-based research approach
[ ] Clear investment philosophy documented

NRI Friendliness

[ ] Accepts NRIs from your country
[ ] Online onboarding available
[ ] Dedicated NRI customer support
[ ] Clear repatriation process

Operations

[ ] Responsive customer service
[ ] User-friendly website and app
[ ] Timely account statements
[ ] Multiple contact channels

Your Next Steps

Choosing a trustworthy AMC requires research, but it's worth the effort. Your money deserves an institution that prioritizes your interests over their own.

Start with your requirements: Which country are you in? What do you need?
Research 5-7 AMCs: Use this guide's framework
Verify before investing: Don't rely on brand name alone
Diversify across AMCs: Don't put all eggs in one basket

If you found this guide helpful, join our WhatsApp community where NRIs discuss AMC experiences, share insights, and help each other navigate Indian investments.

Use Belong's Compliance Compass to check your overall financial compliance status.

Download the Belong app to explore investment options designed specifically for NRIs, including GIFT City mutual funds with zero capital gains tax.

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