Investment research companies like Morningstar collect data from different fund houses. They categorize the funds into different sectors. A fund can be compared only with the funds of the same category because risk profile and investment objective match for the funds of the same sector.
Morningstar receives fund holdings and calculate performance of the funds, arranges funds of same sector in descending order of performance i.e. high performing fund at the top and assigns rank. Peer group ranking is the position of a fund compared to the peers of the same sector.
This is useful to the investors and investment analysts as they can make investment decisions based on the position of a particular fund relative to the other funds of the same sector.
ADVERTISEMENTS 
Sathish Emmadi
Sathish Emmadi is a co-founder & editor at Lastbull.com. He is presently working in IT for one of the world’s top mutual fund companies. Handled multiple projects in BFSI (Banking,Financial Services and Insurance) domain. An Engineering Graduate from NITW.
Related posts:
Loading ...