How We Rank Mutual Funds

Nobias employs a systematic and algorithm-based approach to research and score mutual fund schemes. Our research process consists of multiple steps, which we will describe below:

STEP 1 - Key Return & Ratio Analysis

To assess equity mutual fund schemes, we start by analysing its key ratios on performance, cost and risk based on all available data dating back to the inception of the fund

Performance:
    5, 3 and 1 year rolling returns
    10, 5 and 3 year CAGR

Cost
    Expense Ratio

Fund specific information
    Fund Tenure

Risk:

• Sharpe Ratio

  Measures investment return relative to its volatility, indicating how much excess return an investor receives for taking on additional risk.

• Sortino Ratio

  Similar to Sharpe Ratio, but focuses solely on downside risk, providing a better assessment of an investment's performance in unfavourable conditions.

• Treynor Ratio

  Evaluates investment return adjusted for systematic (market-related) risk, helping investors compare investments based on their sensitivity to market movements.

When these ratios consistently show better performance over an extended period, they receive higher scores

STEP 2 - Fund House Analysis

We conduct a fund house analysis to evaluate their past performance, considering their management of all their funds. This assessment includes:

• A performance score based on the performance of all funds managed by the fund house.

• The fund house’s cumulative experience in managing funds.

• The fund house's score on grievance reddressal.

STEP 3 - Final Score Calculation

The final scores are derived from the amalgamation of the Fund Score and Fund Manager Score. Mutual fund schemes are scored on a scale of 0 to 100, with 100 being the highest score and 0 being the lowest.

STEP 4 - Ranking

Rankings are determined by assessing the final scores of the funds, thereby showcasing their relative standings within their respective categories.

Note - The Nobias scoring and ranking model is updated quarterly. We analyse all equity category funds with a track record of more than 5 years.

This comprehensive and systematic approach ensures that our evaluations are based on up-to-date data, aiding investors in making well-informed decisions.