How to Compare TEFAS Funds
Looking at past return alone is misleading. When picking a fund, weigh risk, cost and real (inflation-adjusted) return together.
Choosing a mutual fund by its last-twelve-months return alone is one of the most common mistakes. A good comparison weighs several dimensions at once.
1. Measure return correctly
Nominal return on its own isn't enough. In a high-inflation environment like Turkey, real return — return adjusted for inflation — is what matters. If CPI rose 50% over the same period, a fund that returned 45% actually lost you purchasing power.
2. Don't ignore risk
High return often comes with high volatility. If two funds delivered the same return, prefer the one that swung less (lower risk).
- Look at the fund's asset mix: equity-heavy or debt instruments?
- Examine its worst drawdowns in past periods.
3. Factor in cost
The management fee, plus any performance fee, erodes return noticeably over the long run. Between two similar funds, the cheaper one is usually the smarter pick.
Past performance is no guarantee of the future — but cost and risk profile are persistent traits.
Summary
When comparing, ask three questions together: What did it return after inflation? How much risk did it take to do so? What does it cost me?