Understanding the Dhanik Score

The Dhanik Score (0–100) blends three objective signals into one number, so you can rank funds inside a category without reading twenty factsheets. It is computed mechanically from public data — no fund house pays for placement, and no human opinion nudges a score up or down.

What goes into the score

• Rating — 50%: the fund's percentile rank within its own sub-category. A large-cap fund is judged against other large-caps, never against debt or small-cap funds, so the comparison is always apples to apples.
• Risk-adjusted return — 30%: the Sharpe ratio — return earned per unit of volatility. This rewards funds that generated returns smoothly and penalises those that lurched their way to the same number.
• Cost — 20%: the expense ratio, where lower is better. Fees are the one thing about a fund that is guaranteed, and they compound against you every single year.

If a fund doesn't disclose one component, the remaining ones are re-weighted rather than the fund being penalised for missing data.

Reading the verdict bands

The blended score maps to a plain-English verdict: 80+ Excellent, 65–79 Good, 50–64 Average, below 50 Below average. Concretely: a fund ranking in the top fifth of its category, with an above-median Sharpe and a below-median expense ratio, will usually land in the 70s or 80s. A chart-topping fund with a bloated expense ratio and jagged returns can score lower than a quieter, cheaper, steadier peer — that is the score working as intended.

What the score does NOT do

• It is not a prediction — every input describes history.
• It knows nothing about you: your horizon, tax situation and risk appetite are outside the data.
• It can't see qualitative events like a fund-manager exit or a mandate change (why that matters).
• A high score isn't "buy" and a low score isn't "sell" — it's a research starting point, not a recommendation.

How to use it well

Use the score to shortlist three to five funds inside the category you've already chosen, then open each fund page and check the things the score can't capture: drawdown history, portfolio overlap with what you already own, and whether the manager who built the record is still there. A practical workflow: sort your category by score in the screener, take the top handful into Compare, and let rolling returns and overlap break the tie. Scores refresh as the underlying data refreshes, so a fund's number can drift over time — a sustained slide is a review signal, a small wobble is noise. Mutual fund investments are subject to market risks; read all scheme-related documents carefully.

→ Read the full method on How We Rank, then shortlist by score in the screener.