What does down-market capture ratio tell you about your investments?

1 ratio measures how well an investment performs compared to its benchmark index when the market is bearish.
2.It is calculated by dividing the investment’s return by the benchmark’s return during the downmarket phase and multiplying by 100.
3.A ratio less than 100 indicates that the investment outperformed the benchmark during the down-market period.
4.A fund with a low market capture ratio might perform better during the market downturn.
5.Along with up-market capture ratio, it is one of the parameters used to compare mutual fund performance.


Content courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.