Picking Equity Funds? 3 Metrics That Actually Matter
Most equity mutual funds look great in bull markets but quietly underperform over time. Before putting your SIP money in any fund, here are three proven filters to find funds that truly deliver — not just shine for one good year.
Choosing a fund by last year's returns is like picking a restaurant by yesterday's rush — both can fool you badly.
Most active equity funds fail to beat their benchmark over 5 years
Key Takeaways
Compare your fund's 3-year and 5-year returns against its benchmark index (Nifty 50, Nifty Midcap 150, etc.) — not against other funds.
Check the fund's Standard Deviation and Sharpe Ratio on Value Research or Morningstar — a good fund delivers higher returns per unit of risk taken.
Review your SIP portfolio at least once every 6 months and exit any fund that has underperformed its benchmark for 3 consecutive years.
Most equity mutual funds look great in bull markets but quietly underperform over time. Before putting your SIP money in any fund, here are three proven filters to find funds that truly deliver — not just shine for one good year.
Here's what happened: As of mid-2026, most actively managed equity funds in India still struggle to consistently beat their benchmark index over 5-year periods.. Fund screeners now allow investors to filter mutual funds by category, benchmark comparison, and risk-adjusted returns — not just raw performance.. SEBI's categorisation rules mean funds must stay true to their mandate, making apples-to-apples comparison easier than ever before..
What you should do: Compare your fund's 3-year and 5-year returns against its benchmark index (Nifty 50, Nifty Midcap 150, etc.) — not against other funds.. Check the fund's Standard Deviation and Sharpe Ratio on Value Research or Morningstar — a good fund delivers higher returns per unit of risk taken.. Review your SIP portfolio at least once every 6 months and exit any fund that has underperformed its benchmark for 3 consecutive years..
A fund that ranks #1 this year often drops to #50 next year. Consistency over 5+ years across market cycles — both bull and bear — is the only reliable signal worth trusting.
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This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.