Whenever you think of investing in mutual funds, the first yardstick that comes to mind to judge a fund is its returns in the short and long term. Many websites directly show you the ‘point-to-point return’ of a fund. That is, how much return was generated from this date to that date. But Radhika Gupta, MD and CEO of Edelweiss Mutual Fund, cautions against trusting the method.
She is of the view that analysing a mutual fund’s performance on the basis of trailing or point-to-point returns is not a good idea.
“Most websites that do MF analytics focus on discrete point-to-point returns. I have said time and again, this is a broken metric because one good year or bad year colours the entire history,” the mutual fund industry veteran said in a post on ‘X’.
Most websites that do MF analytics focus on discrete point to point returns. I have said time and again, this is a broken metric because one good year or bad year colours the entire history.
What matters are Rolling Returns — they show how consistent a fund has been over time,… pic.twitter.com/kZIIhPjq4M
— Radhika Gupta (@iRadhikaGupta) April 21, 2025
According to her, what matters are rolling returns — they show how consistent a fund has been over time, not just at one point. They represent the experience a cohort of investors has had over 3 years or 5 years, she added.
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She says that the performance of any fund cannot be understood just from the data of a fixed period. The fund may have performed very well or very poorly during that period, due to which the entire story is lost.
Instead, she considers ‘rolling returns’ to be more accurate. Rolling returns show how stable and consistent returns a fund has delivered over a long period of time. It also reflects the experience gained by people investing at different times within three or five years.
In keeping with this philosophy, Edelweiss Mutual Fund has now added rolling return data to its fund pages. Now investors can not only view these figures but also analyse them to make better and more informed decisions for the long term,
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