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Evaluating Fund Performance

For better evaluation, a fund should be compared against its category average, peers & benchmark…

When reviewing the performance of the funds that I have selected; what all parameters should i look into? How would I know that the fund that I have invested in is good to remain invested in or exit?
- Vishnu Patel

When reviewing the performance of the fund you have invested in, its stand alone performance is a factor as long as it is in line with your expectations. However, for better evaluation of a fund, its performance should be compared to its category average, the benchmark it tracks as well as the best performers in the category to get a sense on how your fund compares to its peers.

You can use the Value Research star rating to select the relatively better funds within a category. The star rating is based on risk-adjusted rating system and acts as the first filter in fund selection. A higher rating indicates good performance and one should ideally look for funds that have consistently been rated high.



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