One day performance doesn't affect ratings | Value Research Value Research Fund Rating is a convenient composite measure of both returns and risk
Ask Value Research

One day performance doesn't affect ratings

Value Research Fund Rating is a convenient composite measure of both returns and risk

I have a question. What is the criteria for your ratings? How are 1,2,3,4 and 5 stars allotted? I have observed that on 24 August, when the market fell sharply, NAVs of all equity funds were down by around 6 to 7 per cent, except Sundaram Select Focus Fund which was down by around 2 per cent. Still, the fund has been ranked with only one star. Can you throw some light on this issue?
- Vipul Ashara

Value Research Fund Rating (Risk-adjusted Rating) is a convenient composite measure of both returns and risk. It is purely quantitative and there is no subjective component to it. The assessment does not reflect Value Research's opinion of the potential of any fund. It only gives a quick summary of how a fund has performed historically, relative to its peers. A fund's Star Rating is based on the risk-adjusted returns over the past 3 - and 5-years relative to other funds in its category. We update ratings every month on the first working day.

One day outperformance has no bearing on a fund rating. But if the fund falls less than its peers will improve its risk adjusted returns and its ratings. An equity fund must be three years old to be rated and rating is not based on returns alone. A fund should do relatively better than its peers consistently for a better rating. Mere outperformance alone is not sufficient for a better rating, relative underperformance at different periods can adversely affect the rating.

Go through detailed methodology here: Click Here


Other Categories