Dhaval Kapadia, Director, Portfolio Specialist, Morningstar Investment Adviser (India) answers queries in The Financial Express, from where the below has been taken.
I am not too happy with the returns my fund house in showing on its website. Is there any way I can find out whether they are earning more and giving us less returns?
— S P Singh
The returns that fund houses show on their website are based on the Net Asset Value (or NAV) of a fund which is calculated post deduction of fund expenses.
You could compare the performance of the fund vis-à-vis its peers (funds following a similar strategy) and the fund's respective benchmarks.
This performance comparison should focus on medium to long term periods (3 years and above). Even funds with superior long-term performance can underperform over the short term (1 to 2 years).
Besides fund performance, one can compare the expense ratios of funds within the same category. Higher expense ratio for a fund vis-à-vis its peers would typically have a negative impact on its returns.
