Beta
Volatility vs Market
What it means: When the market falls, how much does your fund fall? Beta 1 = same as market. Beta 0.8 = falls less. Beta 1.3 = falls more.
Real feel: You invest ₹1 lakh. The market drops 10% — everyone is panicking. With Beta 0.8, your fund drops only ₹8,000. With Beta 1.3, it drops ₹13,000. Same panic, different pain.
Watch for: Above 1.2 — your portfolio will scare you more during crashes. Below 0.7 — it's likely a conservative or hybrid fund.
Alpha
Extra Return p.a.
What it means: Did the fund manager actually earn their fee? Alpha is the extra return they added on top of what the market gave for free.
Real feel: If a Nifty index fund would have grown your ₹1 lakh to ₹1.12 lakh in a year, and your fund grew it to ₹1.15 lakh — that extra ₹3,000 is Alpha. Negative Alpha means the manager did worse than just buying the index.
Watch for: Consistently negative Alpha over 5+ years = the fund is destroying value. Positive Alpha = manager is earning their keep.
R²
Market Influence
What it means: When your fund goes up or down, how much of that is just the market moving — and how much is the fund doing something unique?
Real feel: R² 95% = your fund is basically riding the market wave. You could almost replace it with a Nifty index fund. R² 50% = the fund makes very independent bets. Diversifying into it actually reduces your overall risk.
Watch for: High R² with high TER = you're paying active fund fees for index-like behaviour. Check if a cheaper index fund does the same job.
Sharpe
Risk-Reward Score
What it means: Are you being paid enough for the stress you're taking? Two funds can return the same amount — but one keeps you up at night and the other doesn't. Sharpe rewards the calmer one.
Real feel: Two jobs both pay ₹1 lakh/month. Job A has random salary cuts, demands weekends, unpredictable. Job B is steady. You'd pick Job B — same pay, less stress. Sharpe helps you pick Fund B.
Watch for: Below 0.5 = you're taking equity risk for almost no extra reward over a safe FD. Above 1.0 = the stress is worth it.
Sortino
Bad-Month Shield
What it means: Sharpe penalises all swings. Sortino only asks about the painful ones — the months when your portfolio actually lost money. Higher = your bad months aren't as bad as they look.
Real feel: Imagine your salary. Some months you get a bonus (good swing — no problem). Some months there's a pay cut (bad swing — this hurts). Sortino measures: when the pay cuts happen, how bad are they compared to your normal salary? Higher Sortino = the cuts are small, the bonuses are big.
Watch for: Below 0.8 = your bad months are genuinely painful. Above 1.5 = even in downturns, this fund recovers well.
Volatility
Ride Smoothness
What it means: How much does your portfolio value jump around every month? Low volatility = calm, predictable. High volatility = some months you feel rich, some months you want to quit.
Real feel: You invest ₹1 lakh. With 14% volatility, your worst months might show ₹96,000 — uncomfortable but manageable. With 28% volatility, your worst months could show ₹85,000 — can you stay calm and not sell in panic? That's the real question.
Watch for: If seeing ₹85,000 on a ₹1 lakh investment makes you want to sell — choose a lower-volatility fund. High returns with high volatility only work if you hold through the scary months.
