HDFC Liquid Fund

What this means. Take every three-year stretch since the fund had a NAV, one starting each month, and ask two things of each: did it beat the typical fund in its category, and by how much. Counting the wins tells you the record does not depend on when you happen to look; averaging the margin tells you whether winning often was worth anything, because four small wins do not pay for one large loss.

How often, and by how much. It lost more windows than it won, but the wins were bigger. Ahead by 391.4 points a year in the 11 windows it won and behind by 0.0 in the 95 it lost, so the average across all 109 is +39.5 points. The worst window ended Jan 2019, 0.1 points behind. The typical window was 0.0 points, far from the average, so a few windows are carrying it. Counting windows makes this fund look worse than the arithmetic does.

What this means. The Regular and Direct plans hold the same portfolio; the Regular one pays a distributor out of your money every day. The gap between the two NAVs is that cost, measured from the NAVs rather than quoted from a document.

What this means. How much of the portfolio was bought and sold in a year, computed from what the fund disclosed each month. Trading costs something certain; the extra return it is meant to buy is not.

What this means. How long a typical top-10 position has been in the top ten. Long-held positions are a decision; a top ten that changes every quarter is a reaction.

What this means. Take each month's ten largest holdings and check whether each one beat the typical stock its category holds over the next six months, and by how much. A blended return can hide two wins and eight losses; a count of wins can hide one position that lost half its value.

What this means. Where the fund sits by size in its category, and how much of its growth was money arriving rather than the portfolio compounding. A very large fund cannot buy what a small one can; size should buy a lower fee in return.

What this means. How long the people running it now have been running it, read from the monthly factsheets. A five-year record earned under someone else is not evidence about these managers.