Our Methodologies

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Mutual Fund

Stocks

Fund Rating

Value Research fund rating is a convenient composite measure of both returns and risk. This single measure combines the Value Research Fund Risk Grade and the Value Research Fund Return Grade to indicate a fund’s risk-adjusted return. This rating is purely quantitative, with no subjective component to it. It is a unified performance measure and summarises how a fund has performed historically, relative to the other funds in its category, for the risks it has taken.

27 September 2023

Value Research Fund Classification

Value Research classifies funds strictly based on their portfolio make-up. This is all there is to it.

27 September 2023

Statistical Variables

Standard deviation measures the total volatility of a fund and is based on the fund’s monthly returns over the last three years. If you add and subtract standard deviation from the mean return, then that would provide you the range within which the fund’s returns have largely varied.

27 September 2023

Mutual Fund Valuation

The P/E ratio offers a way to value a company. It compares the current share price of the company to its earnings per share (EPS).

27 September 2023

Fund Returns Calculation

At Value Research, we calculate returns (irrespective whether it is Trailing, Rolling or SIP) based on the adjusted NAV, which is nothing but NAV adjusted for dividends and splits to ensure that it reflects the true worth of each unit of a mutual fund over the entire course of its existence, since its inception.

27 September 2023

Tracking Error & Tracking Difference

Tracking error measures the level of consistency or divergence between the performance of a passive mutual fund (Index fund or ETF) and its target Index. Mathematically, it is calculated as the annualised standard deviation of the difference in returns between the passive fund and its underlying Index.

27 September 2023

Essential Checks

The Altman Z-score is a measure developed by Edward Altman, who was a finance professor at New York University. It helps predict the likelihood of a company facing financial distress to default within the next two years. It does this by analysing the company's current financial data.

27 September 2023

Stock Financial Ratios

Adjusted EPS = Net Income / Total Shares Outstanding
Cash EPS = (Net Income + Depreciation) / Total Shares Outstanding

27 September 2023

Debt Style Box

Debt style box for a debt fund is a broad measure of its portfolio characteristics regarding the credit risk and interest rate risk your debt fund bears. A 3x3 matrix form captures a debt fund’s interest-rate sensitivity and portfolio’s credit risk. These two major risk factors can affect a bond fund’s performance.

27 September 2023