Quartile Ranking places a fund into Q1 (top 25%), Q2 (26–50%), Q3 (51–75%), or Q4 (bottom 25%) of its SEBI category — a standardised way to assess relative performance.
Quartile Ranking divides all funds within a category into four equal groups by return: Q1 (top 25%), Q2 (top 50%), Q3 (top 75%), Q4 (bottom 25%). A fund in Q1 for 3-year trailing returns means it outperformed 75% of its peers over that period. Quartile analysis is most meaningful when tracked across multiple time periods — a fund consistently in Q1 across 3-year and 5-year periods is genuinely strong. A fund that oscillates between Q1 and Q4 annually may just be making concentrated bets.
Quartile Ranking is the simplest peer comparison tool: 'Where does this fund rank among its peers?' Q1 = top 25% = excellent. Q2 = above average. Q3 = below average. Q4 = bottom 25% = poor. When a fund advisor or article says 'this fund has consistently been in the top quartile,' they mean Q1 for multiple time periods. A single period's Q1 ranking is easy to achieve by luck; consistent Q1 across 3yr and 5yr periods requires skill.
Rank all funds in a SEBI category by trailing return for the chosen period.
Divide into four equal groups: Q1 (top 25%), Q2, Q3, Q4.
Track quartile ranking across multiple periods (1yr, 3yr, 5yr, 10yr).
Consistently Q1 or Q2 across periods = reliable outperformer.