We discuss the different ways in which you can use the Freefincal Equity Mutual Fund Screener. The screener has two pages – a rolling returns sheet and a trailing returns sheet. The Sep 2025 edition is the latest screener at the time of writing. At all times, the top link in this archive is the latest edition of the equity screener.
This screener exclusively covers actively managed equity funds. We also have screeners for index funds, ETFs, Debt/Hybrid funds, stocks and NPS funds.
Amusingly, this equity screener has often been used by us and many other readers to show how very few active funds outperform the index and how indexing is better! These articles are from the archive, and current performance numbers will be different.
- Only five Large Cap funds have comfortably beaten Nifty 100!
- Only these 3 Small Cap MFs have outperformed Nifty Next 50 consistently
- Only 3 out of 28 mid cap MFs consistently beat Nifty Midcap 150!
While we strongly recommend index funds, we also recognise that many people prefer active funds. Therefore, it is important to provide a screener that is grounded in reality. More than 15,000 readers use this screener.
Active funds or passive funds are a tertiary consideration compared to a proper goal-based financial plan. Also see Active vs passive investing: the ground reality
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We recommend the following for those who prefer active funds.
- Select the categories first and build a well-diversified but minimal portfolio. Examples: one flexicap fund, one aggressive hybrid fund, one large and mid cap fund, one large cap and one mid cap fund and so on. If you are not clear about this, then further screening is of little use.
- Avoid a “this or that approach—for example, one active fund plus one passive fund.
- Do not expect active funds to outperform consistently. Be ready to face long periods of underperformance. If you cannot handle this, a passive fund is the superior choice.
- Do not select stars or investor favourites! Choose a quiet, reasonable performer who doesn’t get much attention.
- Look for moderate and consistent outperformance. Cast a wide net with several funds in your shortlist.
- Have the conviction to choose one. But be sure to read the fund’s offer documents to understand its strategy. I personally prefer funds from well-established AMCs.
- Never go by simple trailing returns. That is by recent outperformance.
- Look for a fund that consistently falls lower than the market. Many such funds also tend to be outperformers in terms of their returns. See” Strange, but true! How mutual funds beat the index!
I recommend using this file only after completing the following steps: Define need and duration —-> Decide asset allocation (use this tool) —-> Decide product category —-> Then apply this screener for equity funds.
Rolling Returns sheet
This has the following outputs.
- Rolling return outperformance consistency: the fund returns are compared with category benchmark returns over every possible 1Y, 2Y, 3Y, 4Y, and 5Y period. The higher the outperformance consistency, the better. Suppose 876 fund returns were compared with 876 benchmark returns, and the fund has beaten the benchmark 675 times. The consistency score will be 675/876 ~ 77%.
- Upside performance consistency over every possible 1Y, 2Y, 3Y, 4Y, and 5Y: The higher, the better. A score of 70% means that 7 out of 10 times, the fund performed better than the category benchmark when the benchmark increased. This is a measure of reward.
- Downside performance consistency over every possible 1Y, 2Y, 3Y, 4Y, and 5Y: The higher, the better. A score of 60% indicates that the fund outperformed the category benchmark in 6 out of 10 instances when the benchmark declined. This is a measure of risk protection.
Reward measure: Rolling returns outperformance consistency.
Rolling returns are a simple estimate of how consistently a fund has outperformed a benchmark. Take, for example, the HDFC Top 100 Fund (graph below) vs Nifty 50 TRI between January 1, 2013, and May 15, 2024. There are 1567 5-year rolling returns. If the return for each of these durations is plotted for the fund and index together, we will get a graph like this.
The fund has outperformed the index 649 out of 1567 times. Thus, the rolling return outperformance consistency over seven years is 649/1567 = 41.4%, indicating poor performance. A consistent performer should beat the index at least 60% to 70% of the time. So, the higher the rolling return outperformance consistency, the better.
There are multiple ways to screen for mutual funds. I will discuss two examples. If you are investing with a clear strategy, you should know which category of fund to choose. So, the first step is to select the category. You can either use the macro buttons (top right), 
This can also be done manually.
Then, method A: Set the 3Y and 5Y rolling return outperformance consistency to be above 70% or so. That should give you a nice shortlist to choose from. Then, you can visually look for funds with the right downside protection consistency and pick one. Method B: Look for funds above 70% downside protection consistency over 3Y and 5Y, and choose one. Remember, never set narrow filters and do not be too demanding. Selecting the fund with the best past performance is a sign of plain immaturity. Your screening criteria should yield 5-6 funds at all times.
The trailing returns sheet shows funds that have beaten the category benchmark at lower volatility (standard deviation) over the last 1, 2, 3, 4, and 5 years. The shortlisted funds in this category can vary significantly over time; therefore, this should not be used for primary screening. Rolling returns are a more sedate measure of consistency.
If you plan to pay higher management fees by selecting active funds, consider those that are consistently less volatile and underperform the benchmark less when the benchmark returns are negative. That way, you will at least get some downside protection (if that is important to you) at all times, if not superior returns.
The clearer you are about what you want and how you want to construct a portfolio, the easier it will be to use the screener. The Sep 2025 edition is the latest screener at the time of writing. At all times, the top link in this archive is the latest edition of the equity screener.
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