Investor Q&A: Who will choose the funds & how will portfolio rebalancing happen?


Hello Swapnil,
I want to know more about the investment mechanism & process followed by Goalwise. I have few queries mentioned below. I would be happy to know the answers and it will help me in making a decision.

1.Where the money per month deducted will go? Will it go directly to AMC or to Goalwise and then transferred to AMC?

The money goes directly from your account to the MF companies through our RBI approved payment partners. It is never credited to Goalwise account, neither at the time of investment nor at redemption.

2. Who will choose the funds and how will portfolio re-balancing happen?

Funds selection is done by us based on the fund selection strategy that we have in place. We have made an algorithm that selects the top funds based on this strategy. It has been back tested over the previous years to know that our strategy has been working so far. You can read more about how we select funds here.

Portfolio rebalancing is also automated in our system. We review our fund selections every year and if according to our algo, we think that any other fund is going to perform better, we switch our recommendations with that top performing fund. Once our recommendations change, we send out the notifications to rebalance your SIPs and portfolios so that you stay invested in the top funds year after year. Here's a blog that explains rebalancing and how it is done in more detail -
https://www.goalwise.com/blog/new-feature-one-click-portfolio-rebalance-our-most-advanced-feature-yet/

3. How does Goalwise retain the sanctity of the process, by not just pushing funds of AMC that Goalwise have tie-up with?

We have a tie-up with almost all the major fund houses. You can check the complete list here. As I mentioned, there's no human bias involved in selecting the top funds. We select the funds based on our selection strategy. Even we are investing in the same funds that you are. In the spirit of transparency we have also disclosed the commission we get from each fund house.The commission paid by the MF houses is similar for funds in the same category, so there's no real incentive for us to favor any one fund over another.

More importantly, your trust as an investor is very valuable to us. So it's counter-productive to our long term relationship to base our fund recommendations on such short term incentives. We would rather increase our revenue by helping you grow your money by investing in the top performing funds, rather than simply those which pay us the highest commission.

Hope this clarifies your concerns. Please let us know if we can help with any follow up questions in this regard :)