How to evaluate a fund manager

Two funds in the same category can hold similar stocks and still end up with very different returns — because a fund is ultimately a stream of decisions, and a fund manager makes them. When you buy an actively managed scheme you are, in effect, hiring this person. It is worth interviewing them through the data before you hand over your money.

Start with tenure — whose track record is it?

A fund's glowing 10-year return means little if the current manager arrived 18 months ago. Match the "managing since" date against the period you are judging. If the record you admire was built by someone who has left, you are buying a brand, not a process. Our guide on rolling returns shows how to judge the portion that is genuinely theirs.

Consistency beats one great year

Anyone can top a chart once — a single concentrated bet on the right sector will do it. What separates skill from luck is rolling consistency: does the fund beat its benchmark in most 3-year windows, or only in one spectacular stretch? A manager who returns 14-16% year after year is usually a better hire than one who alternates between +40% and −20%, even if their averages match.

Watch how they lose, not just how they win

Risk control shows up in falling markets. Compare the fund's drawdowns in the COVID crash of March 2020 and the 2022 correction against its category. A manager who fell 30% when peers fell 38% protected four extra rupees of every hundred — capital that compounds through the recovery. Metrics like the Sharpe ratio and Sortino ratio compress this into one number.

Check the size of the mandate

AUM is a headwind in some categories. A ₹40,000-crore small-cap fund cannot buy meaningful positions in genuinely small companies without moving their prices; the manager's edge dilutes as the fund grows. In large-cap funds, size matters far less. Ask whether this manager's style still fits the amount they now run.

Look across their whole stable

• Do all the schemes they manage perform, or just the flagship? Broad competence is a better signal than one hot fund.
• Has their style stayed stable — a value manager still buying value — or does the portfolio drift with fashion?
• How long do they typically stay at a fund house? Frequent movers leave orphaned track records behind.

The takeaway: judge the person and the process, not the headline number. Past performance — even a manager's — never guarantees future results.

→ Browse schemes managed, AUM and track records on Dhanik's fund manager pages, then shortlist their funds in the screener.