Comparing mutual funds is easier when you first decide what you are comparing them for. A scheme that looks attractive in a return table may have the wrong exposure, costs or withdrawal conditions for your goal. Use the same questions for every scheme on your shortlist.
Compare schemes doing a similar job
Start with the investment objective, category and benchmark. Compare like with like: use the same return period, valuation dates, plan and option. A Regular Growth series and a Direct Growth series can have different returns even when they belong to the same scheme.
Write the source date beside each figure. Mixing a current expense ratio with an old portfolio or a different performance window can create a misleading comparison.
Read the factsheet and scheme documents together
A factsheet is a useful summary. The Scheme Information Document, Key Information Memorandum and subsequent addenda provide the detailed terms. Use them to check what the scheme can own, how it operates and what conditions apply to investing and withdrawing.
The latest Riskometer gives scheme-level risk context. Your own risk-tolerance assessment describes your responses; it is a different tool and does not establish that a particular scheme is suitable.
Look through the fund name to the holdings
For equity exposure, examine company and sector concentration. For debt exposure, examine issuer quality, maturity and interest-rate sensitivity. Ask whether the new scheme overlaps substantially with funds you already hold. More fund names do not necessarily mean more diversification.
Read returns alongside the risks
Check performance over more than one window and against the stated benchmark. A recent rally may flatter one strategy. Consider how results changed during difficult periods rather than assuming a smooth annual return.
Risk statistics can help, but only when you understand the calculation and comparison period. A single ratio or star rating should not replace reading the portfolio and mandate. Past performance does not guarantee future results.
Check the costs that affect your outcome
Review the current expense ratio for the exact plan, any exit load and relevant transaction conditions. For passive funds, also examine tracking difference and tracking error. Use the Direct vs Regular comparison to understand why the plan matters.
Finish with a one-page comparison
- Goal and intended holding period.
- Scheme name, plan, option and benchmark.
- Document dates and key holdings.
- Main risks, costs and withdrawal conditions.
- Reason for inclusion and what would trigger a review.
If you cannot explain why a scheme belongs in the shortlist without mentioning last year's return, return to its objective and your goal. Contact stocIQ for product documents and distribution support; seek appropriately registered independent advice where needed.
Frequently asked questions
Should I choose the mutual fund with the highest one-year return?
A one-year return reflects a particular market period. Compare the objective, risks, costs and longer history with similar schemes, then consider whether the exposure fits your goal.
Does a lower NAV mean a mutual fund is cheaper?
A unit price alone does not establish value or future return potential. Compare the underlying strategy, holdings and costs rather than choosing by the NAV level.
Sources and further reading
Sources checked 20 Oct 2026. Check the latest provider documents for scheme-specific terms and processes.