Every fund card carries five risk metrics computed over the fund’s trailing monthly return history. Here is what each measures, and how to read it.

Sharpe Ratio

Return earned per unit of total volatility. Above 1 is considered good; above 2 is excellent; below 0 means the fund underperformed a risk-free treasury bill after accounting for the risk taken.

Think of it this way. Two taxis take you to the airport. The first keeps to its lane and gets you there on time. The second drives faster, cuts sharp turns, weaves between lanes — a rougher ride, but reaches the airport 20 minutes early. The extra roughness (the risk) was rewarded with a proportionately better outcome (time saved). That is a high Sharpe: the volatility the fund experienced was actually paid for with higher returns. High Sharpe does not mean a smooth ride — it means the bumps you tolerated were worth the destination.

Sortino Ratio

Similar to Sharpe but only penalises downside volatility — upside surprises do not hurt the score. Usually higher than Sharpe. A Sortino meaningfully higher than Sharpe suggests the fund’s volatility has been asymmetric toward gains.

Think of it this way. Take the same aggressive taxi that got you to the airport 20 minutes early — except this time, the driver’s shortcut through a red light picks up a traffic fine. The rough driving in general — the sharp turns, the lane-weaving — did not cost you anything; you still arrived early and safely. But the fine is a specific downside: a real cost that stuck. Sharpe would count the entire aggressive style against the fund. Sortino ignores the general roughness and only penalises the actual bad outcomes — the fines. That is why Sortino usually reads higher than Sharpe.

Standard Deviation

Annualised bumpiness of monthly returns. A 20% StDev means the fund’s yearly returns typically vary within ±20% of the average. Lower is smoother but often lower-returning.

Think of it this way. Imagine two joggers going from point A to point B in exactly the same time. One jogs at a steady slow pace in a near-straight line. The other has a dog on the leash — the dog keeps darting sideways, so the jogger has to run faster to make up for all the zig-zagging. Both reach point B at the same time, but the second jogger took a much bumpier path to get there. That is standard deviation — how much a fund’s returns zig-zag around their own average, regardless of where they end up. Two funds can post the same annual return with wildly different rides.

Beta

Sensitivity to benchmark movements. Beta of 1 means the fund moves in lockstep with the index; Beta 1.5 amplifies market moves 1.5x (steeper gains AND steeper losses); Beta 0.5 dampens them.

Think of it this way. Two dance partners on a floor. Beta of 1 means you mirror your partner’s every step exactly — they move right, you move right by the same distance. Beta of 1.5 means you exaggerate each of their moves — they step, you leap. Amplifies both directions equally. Beta of 0.5 means you are a dampened version — smaller, softer moves in both directions. Beta near 0 means you are barely responding to your partner — dancing to your own rhythm on the same floor.

Maximum Drawdown

The worst peak-to-trough loss in the fund’s history. Not just a data point but a behavioural test — could you have held through this without selling? The mathematics of recovery are asymmetric: a 10% loss needs an 11.1% gain to recover, 20% needs 25%, 30% needs 43%, and 50% needs 100%. Headline return figures rarely surface this.

Think of it this way. Imagine ₹100 in your portfolio drops to ₹50 — a 50% loss. To get back to ₹100 from your new base of ₹50, your money does not need to grow 50%. It needs to grow 100% — it needs to double. That is what "asymmetric recovery" means: the smaller you get after a fall, the harder every remaining rupee has to work to climb back. This is why the depth of a fund’s worst drawdown matters far more than headline returns suggest — a fund that lost 50% and then gained 50% is still sitting at ₹75, a full 25% below where it started.

Category Median

The middle value across all full-history peer funds in the same category. Used as the comparison anchor throughout our per-fund commentary.

All metrics are computed over the fund’s available trailing monthly return series; the specific window is stated in each fund’s commentary. Longer-term interpretation improves as history accumulates.

For a deeper walkthrough with worked examples: Sharpe, Sortino & Jensen’s Alpha — what they mean for your PMS →