bl.portfolio Star Track Ratings guide investors through 1,700+ mutual fund schemes across 39 categories and asset classes, highlighting consistent outperformers aligned with long-term goals through a transparent, dependable evaluation framework.
The rating system employs two essential metrics — rolling returns and Sortino ratio — which demonstrate how consistently a mutual fund scheme has generated returns throughout different market conditions while evaluating loss risk. Rolling returns showcase the fund’s capacity to maintain performance over time, while the Sortino ratio focuses specifically on risk-adjusted returns by penalising only negative volatility.
For equity and hybrid schemes, we assess one-, three-, and five-year rolling returns using seven years of NAV data. Debt funds use one-, two-, and three-year rolling returns over five years. One-year trailing returns are also considered to capture the fund’s recent performance pattern. The composite score assigns 60 per cent weight to historical returns, 30 per cent to Sortino ratio, and 10 per cent to trailing returns. Funds are then ranked; top scorers get five stars, lowest get one, helping investors identify strong performers easily.
Summary of the update
The bl.portfolio Star Track Mutual Fund Ratings debuted in October 2018 and receives updates twice annually, utilising data from June-end and December-end. As of June 30, 2025, 509 funds from 33 actively managed mutual fund categories were included in the rating evaluation.
Among these, 43 schemes successfully retained their 5-star ratings from January through June 2025, showing consistency in their performance indicators. Prominent examples in equity funds include Parag Parikh Flexi Cap, ICICI Pru Large Cap, Motilal Oswal Midcap and Nippon India Small Cap. In the Hybrid category, Quant Aggressive Hybrid, Bank of India Mid & Small Cap Equity & Debt and Kotak Debt Hybrid, while in debt funds, several include ICICI Pru Banking & PSU Debt, Nippon India Corp Bond, Aditya Birla SL Dynamic Bond and SBI Magnum Gilt Fund. These funds have demonstrated their capability to provide superior risk-adjusted returns consistently, establishing them as dependable options for investors pursuing steady excellence.
Notably, 39 funds improved their ratings to achieve 5-star status from 4-star. Examples include HDFC Flexi Cap, Nippon India Growth Mid Cap, ICICI Pru Balanced Advantage, HDFC ELSS Tax, Kotak Banking and PSU Debt, Aditya Birla SL Corp Bond and Axis Strategic Bond. These improvements indicate improved fund strategies and advantageous market positioning.
Conversely, 14 schemes were downgraded from five to four stars. Some examples include JM Flexicap, Quant Mid Cap, Edelweiss Balanced Advantage, ICICI Pru Medium Term Bond, Aditya Birla SL Banking & PSU Debt and HDFC Floating Rate Debt Fund.
Several funds advanced from their mediocre performance, moving from either 3 or 2 stars to 4-star rankings, including HDFC Large Cap, Nippon India Vision Large & Mid Cap, SBI Midcap, Axis Small Cap, Nippon India Balanced Advantage, Kotak Medium Term and Nippon India Dynamic Bond.
Maximising the value of the ratings
The rating framework emphasises funds that have provided consistent outperformance over time while maintaining reasonable risk levels, assisting investors in concentrating on long-term wealth creation rather than pursuing short-term winners.
When selecting funds, opt for those with five-star or four-star ratings. Fund selection should align with your asset allocation approach based on your risk tolerance, investment timeline and objectives. If a fund in your portfolio experiences a temporary decline but retains above-average ratings, it’s advisable to remain invested rather than selling. Nevertheless, if a fund’s rating falls to two stars or lower, it may be appropriate to reassess your investment. This measured approach helps investors eliminate underperforming funds while maintaining focus on long-term achievement.
Published on July 26, 2025
