Ask which of two mutual funds is 'better' and the honest answer is: it depends which window you measure, and that dependency is exactly how a lot of comparisons mislead people, intentionally or not. A fund that looks like the clear winner over the last 1 year can be the clear loser over the last 5, and vice versa.
Mistake one: comparing across categories
A large-cap fund and a small-cap fund are not the same kind of investment, and comparing their returns directly tells you almost nothing useful — small-caps are expected to be more volatile in both directions. The category heatmap groups funds into comparable buckets for exactly this reason: a fair comparison starts with putting two funds from the same category side by side, not two funds that happen to be popular.
Mistake two: picking one time window
Almost any fund can be made to look exceptional if you pick the right starting point — right after a sharp dip it recovered from, for instance. The fix is simple but often skipped: look at 1-year, 3-year and 5-year returns together, not just whichever window one fund happens to win on. A fund that's consistently in the upper half of its category across multiple windows is a more trustworthy signal than a fund that only wins on one specific slice of time.
Mistake three: comparing NAV instead of returns
A lower NAV does not mean a fund is 'cheaper' or has more room to grow, and a higher NAV doesn't mean it's expensive — NAV simply reflects a fund's price history and unit structure, not its quality. Two funds with wildly different NAVs can have identical percentage returns. Always compare the percentage return (or better, the SIP/rupee-cost-averaged return) across a matching time window, never the raw NAV number.
- Compare within the same AMFI category, using the /funds page to confirm which bucket each fund actually sits in.
- Check returns over at least two or three different time windows, not just one.
- Compare percentage returns, never NAV levels, as the measure of performance.
- Check the expense ratio gap too — a fund with a slightly lower return but a meaningfully lower expense ratio can still come out ahead after fees over a long holding period.
None of this requires special tools beyond what's already on the factsheet of each fund and the category view on /funds — it just requires comparing the right things against each other.
Compare fund categories on /funds →Common questions
Why shouldn't I compare NAV levels directly?
NAV reflects a fund's price history and unit structure, not its quality -- two funds with very different NAV levels can post identical percentage returns, so NAV alone tells you nothing about which is 'better'.
Is a 1-year return enough to judge a fund?
On its own, no -- a single short window is the most sensitive to recent noise. Checking 1-year, 3-year and 5-year returns together gives a far more reliable picture of consistency.
Is a fund's star rating from a ratings agency enough on its own?
It's a useful starting filter, but it's still worth checking the same-category, multi-window, percentage-return comparison yourself rather than relying on a single rating as the whole decision.
A fair fund comparison stays within the same AMFI category, checks more than one time window, and compares percentage returns rather than NAV levels. Skip any one of those three and almost any fund can be made to look like the best choice in its category -- which is exactly how a lot of casual comparisons mislead people without meaning to.
