Introduction to Mutual Fund Investments

Represents the percentage of fund assets used for management, admin, and distribution costs. Lower Expense Ratios mean more returns stay with investors.

• Good: < 0.5% (low-cost funds)
• Acceptable: 0.5% – 1.5% (active equity funds commonly sit here)
• Poor (high): > 2% (expensive funds, eat into returns)
• Example values: 0.25% (good), 1.2% (average), 2.3% (high)

Measures risk-adjusted returns: how much excess return you get per unit of volatility.

• Good: > 2.0 (excellent risk-adjusted performance)
• Moderate: 1.0 – 2.0 (decent)
• Poor: < 1.0 (weak risk-adjusted returns)
• Example values: 2.3 (very good), 1.5 (moderate), 0.8 (poor)

Similar to Sharpe but uses downside volatility only — better when you care about downside risk.

• Good: > 2.0
• Moderate: 1.0 – 2.0
• Poor: < 1.0
• Example values: 2.1 (good), 1.3 (moderate), 0.6 (poor)

Indicates the fund manager’s value-add compared with a benchmark (in percentage points).

• Good: > +2.0% (meaningful outperformance)
• Neutral: around 0% (in line with benchmark)
• Poor: < −2.0% (significant underperformance)
• Example values: +3.1% (good), +0.4% (small outperformance), −1.8% (underperformance)

Shows fund’s sensitivity to market moves. Beta of 1 = moves with market; <1 = less volatile.

• Low-volatility (good for conservative investors): < 1.0 (e.g., 0.6–0.9)
• Market-like: ≈ 1.0
• High-volatility (higher risk): > 1.5
• Example values: 0.8 (low vol), 1.2 (market-ish), 1.6 (high vol)

Standard deviation measures how much returns vary from average. Higher value = higher volatility and risk.

• Low volatility: < 8% annualized
• Moderate volatility: 8% – 15%
• High volatility: > 15%
• Example values: 6.5% (low), 12% (moderate), 21% (high)

R-Squared indicates how much of the fund’s movement is explained by its benchmark (0–100%).

• Good (tracks benchmark closely): > 85%
• Moderate: 50% – 85%
• Poor (diverging strategy): < 50%
• Example values: 92% (closely tied to benchmark), 68% (somewhat related), 34% (largely independent)

Total market value of all investments managed by the fund. Larger AUMs indicate investor trust and fund stability.

• Small: < ₹100 crore (niche or new funds)
• Medium: ₹100 crore – ₹1,000 crore
• Large: > ₹1,000 crore (well-established)
• Example values: ₹45 crore (small), ₹420 crore (medium), ₹5,200 crore (large)

Compound annual growth rate shows the annualized return over a period assuming reinvestment.

• Excellent (equity funds): > 15% p.a.
• Good: 12% – 15% p.a.
• Moderate: 8% – 12% p.a.
• Poor: < 8% p.a.
• Example values: 18% (very good), 11% (moderate), 5% (poor)

The per-unit value of the fund, calculated as (Total Assets − Liabilities) ÷ Units Outstanding. NAV itself isn't 'good' or 'bad' — growth vs peers matters.

• Example interpretation: NAV grew from ₹10 to ₹25 in five years → strong absolute growth; compare with peers/benchmark.
• Example values: ₹12 (new), ₹45 (mature)

A small fee charged if you redeem your investment before a specific period, usually to discourage early withdrawal.

• Typical rules: 1% if redeemed within 365 days; 0% after the lock-in in many schemes.
• Example values: 1% if redeemed within 1 year, 0% after 1 year; some ELSS funds have a 3-year lock-in.

Reference index used to compare fund performance.

• Good match: Benchmark should reflect fund’s stated strategy (e.g., large-cap fund → Nifty100 / S&P BSE 100)
• Examples: NIFTY 50, S&P BSE Sensex, Nifty Midcap 150

Portfolio turnover rate: how frequently holdings are traded annually.

• Low-turnover: < 50% (buy-and-hold)
• High-turnover: > 100% (active trading)
• Example values: 35%, 120%

Tracking error shows deviation from benchmark (used for index/ETF monitoring).

• Low (good for trackers): < 1%
• High (active): > 2%
• Example values: 0.3%, 1.4%, 3.2%

Number of securities held — indicates diversification or concentration strategy.

• Concentrated: < 30 holdings
• Diversified: 50–200 holdings
• Example values: 18, 72, 180

Share of top-10 holdings — measures concentration risk.

• Low concentration: < 40%
• High concentration: > 60%
• Example values: 28%, 45%, 68%

Manager tenure indicates experience and consistency.

• Strong: > 5 years with same strategy
• Short: < 2 years may indicate recent change
• Examples: 7 years, 3 years, 0.5 years

Minimum investment required to start — useful for retail planning.

• Typical lumpsum: ₹500 – ₹5,000 for many funds
• SIP: ₹100 – ₹500 minimum monthly for many schemes
• Examples: ₹500 lumpsum, ₹500 SIP