Use this screener datasheet to choose mutual funds that have consistently outperformed a category benchmark over every possible 3,5,7 year periods from April 3rd 2006 to June 2nd 2017. Includes a “how-to-use” video. All equity funds and equity-oriented balanced funds (excluding equity savings funds) have been considered. The method adopted is based on this report: A simple way to measure mutual fund performance consistency.
Update: Now the Nifty Next 50 Total Returns Index is used. Thanks to the latest update: Download Historical Total Returns Index Data of 52 NSE Indices.
Mutual Fund Performance Consistency Score
Rolling returns are a simple way to estimate how consistency a fund has outperformed a benchmark. Three-year rolling returns have been considered. For example, suppose 1000 such 3Y returns are available for the fund and 800 such returns for the benchmark. Here is an example:
We ask how many times has the fund got a better 3Y return than the benchmark. Suppose 500 such fund returns are higher, the performance consistency score is computed as
= 500/800 = 63%.
The minimum of (1000 and 800) = 800 is used in the denominator.
Higher the consistency score, the better the fund has performed with respect to the benchmark.
The simplest way to understand the efficacy of this method is to consider the performance score of well-known poor performers – certain funds from JM Mutual or LIC Nomura – and check their consistency score. It would be quite low.
I think any score about 60% is reasonable and above 70% quite good. Less than 50% for the 3Y rolling returns is probably a warning sign to monitor closely.
An excel sheet in which funds can be screened for consistency across categories or per category is attached below. The benchmarks used are as follows.
I had replaced many benchmarks with the Nifty Next 50 (and now TRI) as it is much harder to beat even for mid-cap and small-cap funds.
|International||EQ-INTL||Nifty Next 50 TRI (new)|
|Mid-cap||EQ-MC||Nifty Next 50 TRI (new)|
|Multi-cap||EQ-MLC||Nifty Next 50 TRI (new)|
|Others||EQ-OTH||Nifty Next 50 TRI (new)|
|Small Cap||EQ-SC||Nifty Next 50 TRI (new)|
|ELSS||EQ-TP||Nifty Next 50 TRI (new)|
|Balanced||Balanced||BSE Balanced Index|
Using the Mutual Fund Screener
The screener sheet in the file contains all entries. To display only one or two categories, the user can click on the grey square (red oval below), then uncheck “select all: and then select the categories required. The screener is easy to use with Excel’s data filters.
If the no of rolling return entries is less than 500 then the fund is quite young to be judged. Higher the entries, the better.
Select a cut off for the consistency score: Above 60% or above 70% as mentioned above and check the funds which have done well. You can use this in combination with the Sep 2016 returns listing.
You can view additional guides for
Do let me know if you any feedback to make this better.
Please note: These screeners are for choosing new funds and not for revewing existing ones.
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