Last Updated on December 18, 2021 at 10:51 pm
A simple way to measure how consistent a mutual fund has been in outperforming a benchmark over a given period, in the form a simple percentage is discussed in this post. Depending on your feedback I will include this in this months mutual fund return listings.
The simplest and most intuitive way to measure outperformance is to use rolling returns.As regular readers may be aware freefincal has rolling return calculators for both lump sum and SIP investments with a choice of 50 benchmark indices for comparison.
The most important advantage with rolling returns is that they are simple to understand. Way more simpler than the greek alphabets – alpha, beta, gamma, Sharpe, Sortino etc. and even simpler than upside and downside capture ratios.
What are rolling returns
Suppose I ask what is the return for the last 3 years for a fund. I am considering the NAV growth between two days. The current NAV and the NAV three years ago. This is known as a point to point calculation. The return value depends on when I choose to make a calculation.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
Instead, if I have NAV data for the past 10 years and calculate the three return between
1st Jan 2006 to 31st Dec 2008
2nd Jan 2006 to 1st Jan 2009
3rd Jan 2006 to 2nd Jan 2009 and so on for every business day from 1st Jan 2006 to the current day.
So you can imagine that I will get 100s of 3Y return data points for the fund. Then I repeat the exercise by choosing an appropriate benchmark and compare the two. Here is an example.
The graph immediately tells you that the fund has been quite regular in beating the chosen benchmark. This gives a easy to understand visual measure of performance consistency.
This can be expressed as a percentage too:
Consistency score = (no of times fund has beat index)/(total no of rolling return entires). Expressed as a percentage.
Higher this score, the more consistent the fund has been in outpeforming the benchmark.
Three-year rolling return consistency score wrt Nifty 50 TRI
The funds which have a scopre above 70% are highlighted in green. The same data in bar chart form.
Three-year rolling return consistency score wrt Nifty 50 Value 20
The Nifty 50 Value 20 is a concentrated index of 20 value stocks from the Nifty 50. It is a much more stringent benchmark for evaluating large cap funds. However much of the index data is backtested. So we will have to check real time data for a while to evaluate the suitability of this index.
Amusing only ICICI Focussed Blue Chip has a reasonable track record against the Value 20 index.
The consistency score is a simple way to determine outperformance with respect to a chosen benchmark. Do let me know what you think about this.
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 7000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 2,500 investors and advisors use this!
Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.





- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
About The Author

Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!


Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Your Ultimate Guide to Travel
