New mutual fund houses are lining up. Should you trust them with your money?

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Wealth management, PMS (portfolio management services), quant and fintech firms have applied for mutual fund licences. While it is advisable to go with existing schemes that have a long track record, new fund houses may offer innovative products or investment processes.

Here are a few things to keep in mind before deciding to invest with a new fund house.

The first thing to check is whether the firm has any track record of managing investments. For instance, if the firm has managed PMS or alternative investment funds (AIFs), it can offer some insight into its investment capability.

“However, investors should treat such a track-record with caution as managing PMS and AIF portfolios differs from managing mutual funds where daily investor inflows and outflows also need to be managed,” said a distributor, requesting anonymity.

A clear investment philosophy is a good starting point.

"Where there is no mutual fund performance track-record, investors should first understand the team behind the fund house, their experience across different market cycles, and their investment philosophy," said Ravi Kumar TV, co-founder of Gaining Ground Investment Services.

“Is the investment philosophy different from what you are currently holding? Therefore, is it worth looking at a new investment style for diversifying your portfolio? Investors must ask these questions when considering a new fund house. Avoid new funds if they only lead to duplications,” said Anup Bhaiya, founder of Money Honey Financial Services.

A new fund house can outline an elaborate process at launch, but what matters is whether it sticks to that process once schemes are up and running, especially in actively managed funds.

"Investors should track whether the fund house stays true to its stated investment approach or drifts away from it, and that only becomes clear over a few years," said Amol Joshi, founder of Plan Rupee Investment Services.

A robust, well-defined process matters for another reason: it helps sustain performance even when a fund manager exits, as investment decisions are driven by a framework rather than an individual.

“A strong management team might still be worth considering. Several new fund houses are being launched by mutual fund industry veterans,” Bhaiya said.

“At the same time, the new fund may not necessarily be backed by an industry veteran, but the parent company could be strong enough to attract the best talent within the industry,” he added.

If investors want to experiment with a new fund house, it is advisable to wait for at least a few quarters—if not longer—to assess the fund’s initial performance.

“Investors who may want to invest in a new fund house's scheme can do so with a small allocation as part of their satellite portfolio and keep a close watch on the fund’s performance vis-a-vis its peers,” Bhaiya said.

A measured approach can help investors benefit from potentially differentiated strategies while limiting the risks that come with backing an untested fund house.

Jash Kriplani is a seasoned journalist based in Mumbai with more than 15 years of experience across some of India’s leading publications, covering personal finance and investments. Over the years, he has developed a strong reputation for breaking down several complex financial concepts into clear, accessible insights for everyday investors, with a particular focus on helping individuals make informed decisions about their money.<br><br>Jash has consistently written with a reader-first approach, blending storytelling with practical guidance. His work often reflects a deep understanding of investor behaviour, market cycles, and the evolving financial landscape in India, while staying grounded in data-driven insights and the real-world context.<br><br>He is also a Certified Financial Planner (CFP), having earned the credential from the Financial Planning Standards Board Ltd, USA. This professional training complements his journalistic work, allowing him to bring a deeper perspective to his writing. Through his work, he aims to bridge the gap between financial theory and real-world application for Indian investors, empowering them to build sustainable, long-term wealth.<br><br>In his free time, he likes to read and spend time with family.

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