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Analysing Mutual Fund Performance Key Metrics to Consider


Finding the most important metrics to consider, regardless of how long you have been investing, is essential. These measures allow you to assess the success of the mutual fund and make plans for future investments.

This article will help you understand the critical measures to take into account while evaluating the performance of your mutual fund, which will aid in helping you make important investment decisions.

Key Metrics to Consider for Mutual Fund Performance

Mutual funds are the popular choice of investment these days. Even though you can use a mutual fund calculator to determine the amount you will make, understanding how to analyse that performance is critical. Below are vital metrics to remember while analysing your MF’s performance.

Compare Performance with Benchmark Performance

The first thing is to constantly compare your mutual fund’s performance with the benchmark’s. Irrespective of the mutual fund you choose, each fund will have its benchmark index. Look for the fund that constantly beats this benchmark in the long run. Therefore, finding a fair and unbiased benchmark index is also essential.

You can consider CRISIL or S and P BSE for debt-oriented mutual funds as suitable benchmark indicators. This benchmark comes in handy when you use the mutual fund calculator to determine the amount you can make. Moreover, when you review the performance and the mutual fund you choose shows less than the benchmark, you can avoid buying the same.

Check the Expense Ratio

The expense ratio occupies an integral part of the mutual fund. The expense ratio is the annual expenses you must pay to manage your fund as a percentage of its assets. This amount includes administrative costs, management fees, and other operational expenses. Therefore, always look for a fund with a lower expense ratio as it will be more cost-effective. Moreover, it will help you make more money.

Analyse the Mutual Fund’s Portfolio

Portfolio plays a vital role in analysing your mutual fund’s overall performance. Always check the mutual fund’s top holdings, industries, sectors, and geographical diversification in which it invests—all these help in understanding the risk profile of the mutual fund and preparing the investment strategies accordingly.

Measuring Returns

Comparing performance with a benchmark is different from measuring returns. Your fund’s total return is your investment’s increased or decreased amount. Most people consider this parameter as an actual way of measuring performance. You can use a mutual fund calculator to determine the amount each fund will give after a specific period.

Once you have that, you can compare two or more funds to check which is more profitable. You can also use past performances to estimate how the fund has performed. However, remember that good past performances do not always mean a positive performance. It depends on many other factors, including market fluctuations.

Compare Similar Mutual Funds

You cannot compare an orange with an apple; similarly, two mutual funds cannot be compared. If you want an accurate picture of a mutual fund’s performance, you must compare mutual funds of a similar nature or group.

Check Mutual Fund’s History

To understand a mutual fund accurately, always check its history, especially during unfavourable market times. You can only do it for funds with a longer time in the market, like 5 or 10 years.

For a perfect picture, compare the fund’s history and performance across different business cycles and time intervals. Then, if you find a fund that has performed consistently in line despite market conditions, it will be a perfect fund for investment. Similarly, if the fund has lost less compared to the benchmark in the evaluation period, that fund will also be a good fit for your investment portfolio trendytarzen.


Selecting the right mutual fund for investment is significant as it can ensure you avoid losing. Hence, everyone needs to consider some critical vital metrics that can help determine which fund is better than the other. The metrics mentioned above can offer a comprehensive understanding of how a mutual fund has performed, is performing, and may perform in the future. Use these to analyse the performance and choose the ideal mutual fund for your investment.

Written by
Suza Anjleena

Suza Anjleena is a Blogger, Tech Geek, SEO Expert, and Designer. Loves to buy books online, read and write about Technology, Gadgets, Gaming, LifeStyle, Education, Business, and more category articles that are liked by most of her audience. You can contact me via Email to: Thanks

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