Capture Ratio

The capture ratio is a performance measurement tool used to evaluate how much of a benchmark index's gains a mutual fund captures during rising markets (upside capture ratio) and how much of the benchmark's losses the fund experiences during falling markets (downside capture ratio). The upside capture ratio is calculated as: Fund Return in Up Markets ÷ Benchmark Return in Up Markets × 100, and the downside capture ratio as Fund Return in Down Markets ÷ Benchmark Return in Down Markets × 100. An ideal actively managed fund has a high upside capture ratio (above 100 — outperforming the benchmark during rallies) and a low downside capture ratio (below 100 — losing less than the benchmark during corrections). In Indian mutual fund evaluation, capture ratios help investors identify funds that demonstrate asymmetric return characteristics — participating more in market upside while protecting better in downturns. SEBI-regulated fund fact sheets and third-party platforms like ValueResearch and Morningstar India publish capture ratios for Indian equity funds.