How-to scheme comparison MF analysis

How to compare two mutual fund schemes

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Comparing two MF schemes requires multi-axis analysis. Single-axis comparison (1-year return) leads to poor decisions. Discipline: choose one; don’t hold both.

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Step-by-step procedure

See the procedure infobox above for the seven steps.

Comparison matrix template

AxisScheme AScheme BWinner
Category match✓✓Tie
5-year CAGR vs benchmark+200 bps+150 bpsA
7-year CAGR vs benchmark+250 bps+100 bpsA
Sharpe ratio0.850.78A
Max drawdown-38%-35%B
Direct TER0.80%1.10%A
Manager tenure8 years3 yearsA
AUM12,000 cr2,500 crEither
Portfolio overlap---
Overall--A

See also

External references

References

  1. SEBI (Mutual Funds) Regulations, 1996.
  2. SEBI Categorisation Circular, October 2017.
  3. AMFI Best Practice Guidelines.

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