How INDmoney Rank Works
Every eligible mutual fund on INDmoney gets an IND Rank - such as 1/22, 2/22 or 3/22 - showing where the fund stands among peer funds in the same SEBI category. The rank is calculated using a composite methodology that evaluates performance, risk management and cost. Here is exactly how it works.
Three things that determine a fund's rank
Performance
40 – 60% of total score
How well does the fund deliver returns relative to its benchmark? Measured using Information Ratio, Up-capture and Alpha over 1, 3 and 5 years.
Risk
35 – 60% of total score
How much volatility, drawdown and downside does the fund expose investors to? Lower risk improves the score.
Cost
5 – 25% of total score
What does the fund charge? Lower expense ratio = higher cost score. Applies equally to all fund types.
Why these three? Long-term wealth creation depends not just on picking a fund with high past returns, but on how consistently it generated them (performance quality), how much risk was taken to get there (risk-adjusted view), and how much the fund house keeps for itself each year (cost drag).
What does the rank number mean?
After calculating the composite score, all eligible funds in the same SEBI sub-category are sorted from highest to lowest. The fund's position in that sorted list is its IND Rank — shown as 1/22, 2/22, 3/22 and so on.
| Rank 1 = best fund in the category. A fund showing 1/22 scored the highest composite score among 22 eligible funds in its SEBI sub-category. Rank 22/22 scored the lowest. The total count changes by category — small cap may have 22 eligible funds, large cap may have 26. |
On the fund detail page, INDmoney also breaks down the composite score into its three pillars — so you can see exactly where a fund is strong or weak:
How the three scores are combined
The weight given to each pillar varies by fund type, because what matters most for a debt fund differs from what matters most for an equity fund.
For index funds, tracking error replaces traditional performance metrics. Since the fund's job is to mirror an index — not beat it — lower tracking error is the key quality signal, alongside a low expense ratio.
For debt funds, risk accounts for 60% because credit quality and duration risk are the primary drivers of loss for fixed-income investors.
| Fund type | Performance | Risk | Cost |
|---|---|---|---|
| Equity (active) | 50% | 40% | 10% |
| Index / Passive | 60% | — | 40% |
| Debt | 35% | 60% | 5% |
| Conservative hybrid | 40% | 50% | 10% |
| Aggressive hybrid | 50% | 40% | 10% |
| Balanced hybrid | 45% | 45% | 10% |
| Arbitrage | 40% | 35% | 25% |
For index funds, tracking error replaces traditional performance metrics. Since the fund's job is to mirror an index — not beat it — lower tracking error is the key quality signal, alongside a low expense ratio.
For debt funds, risk accounts for 60% because credit quality and duration risk are the primary drivers of loss for fixed-income investors.
Step by step - how the score is computed
1. Collect raw data for 1-year, 3-year and 5-year windows
For each metric (e.g. Information Ratio, Standard Deviation), raw values are fetched for each available time window. Newer funds with less history use only available windows — a fund aged 3–5 years uses 1Y and 3Y data only; a fund under 3 years is either excluded or uses 1Y only depending on fund type.
2. Normalise within the category
Each raw value is converted to a 0–1 score using: (fund value − category min) ÷ (category max − category min). This ensures a fund is always judged relative to its peers — not against all mutual funds in India.
3. Weight time periods into a single metric score
For funds ≥5 years old, the three normalised values are combined: 1Y × 20% + 3Y × 30% + 5Y × 50%. Longer-term data carries more weight. For 3–5 year funds: 1Y × 30% + 3Y × 70%. This gives a single 0–1 score for each metric.
4. Invert metrics where lower is better
For metrics where a lower value is better — Standard Deviation, Down-capture Ratio, Expense Ratio, Tracking Error, Modified Duration — the score is inverted: 1 − normalised score. This keeps all components pointing in the same direction (higher = better).
5. Combine into Performance, Risk and Cost pillar scores
Individual metric scores are combined using the per-pillar weights (e.g. for equity: Information Ratio 60% + Up-capture 30% + Alpha 10% = Performance Score). This produces three pillar scores between 0 and 1.
6. Combine pillars into a final composite score
The three pillar scores are combined at the fund-type weights shown in the table above (e.g. equity: Performance 50% + Risk 40% + Cost 10%). The result is a single composite score per fund.
7. Rank within category and assign 1–5 band
All funds in the same SEBI sub-category are sorted by composite score (descending) and their percentile position is mapped to an IND Rank: top 10% → Rank 5, next 20% → Rank 4, middle 40% → Rank 3, next 20% → Rank 2, bottom 10% → Rank 1.
Why is a fund shown as “Not Ranked”?
A mutual fund is shown as Not Ranked when it does not currently meet INDmoney’s eligibility criteria for ranking. This may be because the fund is relatively new, has assets under management below the required threshold, belongs to a specialised or excluded category, is close-ended, or does not have sufficient comparable data.
Not Ranked does not mean that a fund is poor-performing or unsuitable. It only means that INDmoney has not assigned the fund a comparative rank under the current methodology.
Only direct plan, growth option, open-ended funds are scored independently. Regular plans and dividend variants inherit the same rank as their direct-growth counterpart. Close-ended funds receive no rank.
Additionally, the following are excluded from ranking ("Ranking not available" is shown on the app):
| Fund category | Exclusion criteria |
|---|---|
| Equity funds excluded | AUM ≤ ₹100 Cr; Age < 3 years; Sector – Technology; Sector – FMCG; Sector – Healthcare; Sector – Financial Services; Sector – Precious Metals; ESG Funds; Infrastructure; Consumption; Global – Others |
| Debt funds excluded | Age < 1 year; Overnight funds; Liquid / Ultra-short with AUM ≤ ₹5,000 Cr; Other categories with AUM ≤ ₹500 Cr; Fixed maturity plans (FMP) |
| Hybrid funds excluded | AUM ≤ ₹500 Cr; Age < 3 years; Multi-asset allocation; Dynamic asset allocation; Fund of Funds (FoFs); Children's funds; Retirement funds |
| Why exclude sector funds? Sector funds are concentrated bets on a single industry theme. Their performance is highly driven by macro and regulatory cycles rather than fund manager skill. Ranking them against each other or against diversified funds would be misleading for most investors. |
Frequently asked questions
No. IND Rank is INDmoney's own proprietary system. While CRISIL and Morningstar ratings are widely respected, IND Rank uses its own metric selection, weightage model and normalisation approach. The goal is to surface the best risk-adjusted, cost-efficient funds within each SEBI category for INDmoney users.
Yes. Because ranks are relative and assigned within a peer group, if peer funds improve significantly, a fund's rank can fall — even if its own metrics are unchanged. This is intentional: a fund that was merely average last year may now be below average if competition has improved.
IND Rank is one input, not the only one. A Rank 5 fund in a high-risk category may still be unsuitable if your investment horizon is short or your risk appetite is low. Always consider the fund's category, your financial goal and your existing portfolio before investing.
Index funds have a single objective — replicate the benchmark as closely and cheaply as possible. So their performance pillar uses Tracking Error (lower = better) instead of Information Ratio or Alpha. Cost gets a higher weight (40%) because for passive funds, the expense ratio is one of the biggest differentiators over the long run.
Underlying metrics — including Information Ratio, Standard Deviation, Tracking Error, Up/Down Capture Ratios, Max Drawdown and Modified Duration — are sourced from Morningstar's data API. Portfolio quality flags for debt funds are generated using IND Protect, INDmoney's in-house credit risk assessment tool.
IND Rank is recalculated periodically as the underlying Morningstar data refreshes. Because rankings are peer-relative and data is live, a fund's rank may shift between refreshes even without any change in its own portfolio or performance.