Quartile rank
A fund's position within its peer category divided into four equal buckets — Quartile 1 is the top 25%, Quartile 4 is the bottom 25%.
Quartile rank places a fund's performance in context. A 14% CAGR means very different things if every peer returned 18% (Q4, poor) versus if most peers returned 10% (Q1, excellent). Quartile rank converts raw numbers into a peer-relative standing.
What it measures
MintByte assigns every fund a quartile rank (Q1–Q4) within its SEBI-defined category (e.g. "Large Cap Fund", "Mid Cap Fund", "ELSS") based on trailing return over a specified window. Q1 is the top-performing 25% of funds in the category; Q4 is the bottom 25%.
Quartile rank is computed separately for multiple horizons: 1-year, 3-year, and 5-year trailing returns. A fund that is Q1 on 3-year but Q3 on 1-year may have had a weak recent period despite a strong track record.
How it is computed
- Collect all funds in the SEBI category with sufficient history for the window.
- Rank them in descending order of return (highest = rank 1).
- Divide the ranked list into four equal groups:
- Rank 1–25%: Quartile 1
- Rank 26–50%: Quartile 2
- Rank 51–75%: Quartile 3
- Rank 76–100%: Quartile 4
quartile = ceil(percentile_rank / 25)
where percentile_rank = (rank_in_category / total_funds_in_category) × 100
Example: A category has 42 large-cap funds. A fund ranks 9th by 3-year return. Percentile = (9/42) × 100 = 21.4% → Q1.
How to interpret
- Q1 consistently: Top-tier manager; check if performance is due to genuine skill, factor tilt, or a single-year outlier.
- Q1 on one horizon, Q3/Q4 on another: Inconsistency. Investigate what changed (manager, strategy, AUM).
- Q2–Q3 consistently: Median performer. Returns peer index; TER drag makes this suboptimal versus a passive index fund.
- Q4 on any horizon > 1 year: Requires strong justification to hold. Most investors should consider switching.
In India's large-cap category, SEBI data shows the average actively managed fund slides from Q2 to Q3 over 10 years, partly due to fee drag. Quartile rank helps surface the exceptions.
Limitations + caveats
Quartile rank is category-locked. SEBI's category definitions can change (as they did substantially in 2018), which reshuffles category membership and can shift historical ranks artificially. Funds at category boundaries (e.g. a large-cap fund holding some mid-cap exposure) may be ranked against an imperfect peer group. Ranks are also point-in-time snapshots; see Peer Percentile for the continuous version.
Related metrics
- Peer Percentile — continuous version of quartile rank; 95th percentile = top 5% of peers.
- Rolling Returns — rolling quartile rank over time shows whether Q1 performance is consistent or episodic.
- Alpha — explains why a fund is Q1: whether it's genuine excess return vs. a factor tilt.
Sources
Category membership: SEBI classification. Return data: AdvisorKhoj API. Quartile ranks recomputed monthly after returns refresh. Categories with fewer than 5 funds suppress the quartile display (insufficient peer set).