Mutual Fund Research

Our final verdict on the fund: Tier 1 strong and consistent, Tier 2 solid with room for improvement, Tier 3 review suitability.

How we use it: Derived from the 0–100 Fund Quality Score. Thresholds start at 62 (Tier 1) and 40 (Tier 3) and are recalibrated to the median score of the strategy's own universe, so tiers stay meaningful even when research data is sparse. Override guards for cost, rolling consistency and weak risk-adjusted return can pull a tier down after scoring.

The degree of shared stock holdings between funds selected within a research strategy basket.

How we use it: Screened during basket assembly to ensure funds don't hold the same underlying equities. Minimising holding overlap prevents hidden stock concentration and ensures genuine diversification.

Return earned above (or below) the fund's own benchmark, after adjusting for the market risk taken. Negative means the index did the job better.

How we use it: Alpha ≥ +2% is flagged as genuine outperformance; ≤ -3% is flagged as lagging the benchmark and counts against the fund in the tier reasoning. A -3.2 reading is a persistent-underperformance signal, not noise.

Return per unit of downside volatility — it ignores upside swings and only penalises losses.

How we use it: Scored as ratio × 40, capped at 100, at 8% of the quality score. ≥1.5 reads as strong downside efficiency; below 1.0 is flagged as weak. 0.9 means the fund is being paid barely less than one unit of return per unit of pain.

Return per unit of total volatility, above the risk-free rate.

How we use it: Mapped as 30 + Sharpe × 35 into a 0–100 sub-score, and re-stated as an M² risk-adjusted return (6.5% risk-free + Sharpe × 15% reference volatility) which carries 10% of the score. Sharpe under 0.5 hard-blocks Tier 1.

How much the fund moves for every 1 unit the market moves. Below 1 means it cushions falls but lags rallies.

How we use it: Used to sanity-check alpha: high-beta funds that only outperform in bull runs are treated as leverage, not skill. 0.95 means roughly 5% less swing than the market in both directions.

The worst peak-to-trough fall the fund has ever put an investor through.

How we use it: Scored linearly — 0% maps to 100, -20% to 67, -40% to 33, -60% to 0 — at 7% of the quality score. -29% means an investor entering at the top waited through nearly a third of their capital being underwater.

Measures holding concentration in the top 10 stock positions and single-sector weightings.

How we use it: Funds with excessive single-stock or single-sector concentration are flagged during quantitative screening to avoid concentrated downfall risk within strategy baskets.

Annualised standard deviation of returns, compared against the fund's own category average rather than an absolute bar.

How we use it: Judged relative to the category so a mid-cap fund is not penalised for behaving like a mid-cap fund. Persistently above-category volatility without matching return is a downgrade signal.

Volatility measured only on negative-return periods — the half of risk that actually costs money.

How we use it: Compared against category peers alongside Sortino. A fund whose downside risk sits above category while its Sortino sits below 1.0 will not be tiered as a core holding.

How reliably the fund repeated its returns across every rolling 3Y, 5Y and 10Y window — not one lucky start date.

How we use it: The single heaviest block in the score: 11% (3Y) + 9% (5Y) + 7% (10Y) for stability, plus 19% for the median rolling return level and 7% for rolling returns versus category. A stability score under 40 blocks Tier 1. 'Insufficient data' means the NAV history is too short to compute the window honestly — we show that instead of guessing.

The annual fee the AMC charges, deducted from your NAV whether the fund performs or not.

How we use it: Scored as 100 − (TER ÷ plan limit) × 60, where the limit is 1% for direct plans and 2% for regular, at 10% of the score. Above the limit the fund cannot be Tier 1; above 1.25× the limit it is forced to Tier 3.