P/E ratio and its importance

One of our readers recently wrote to us asking how they can check the price-to-earnings (P/E) ratio of a mutual fund scheme on our Value Research Online website. And more importantly, if the same can be checked for a historical period. One can check the latest P/E ratio of a fund on Value Research Online, by clicking on the 'Portfolio' tab of the fund page. Look for the box with the heading - 'Concentration & Valuation'. Besides the P/E ratio, you would also get to know the latest price-to-book (P/B) ratio of the fund. However, it isn't possible to access the historical P/E and P/B ratios for a fund on our website. But are they so important? Well, that's another question that we are often asked - how important or relevant is the P/E ratio when choosing an equity mutual fund scheme? To answer this, let us first understand what the P/E ratio is. For a company, a P/E ratio tells you

This article was originally published on June 14, 2022.