What is Win Rate?
Win Rate (also called Absolute Win Rate) is the simplest metric: what percentage of trading days did the fund have a positive return? It doesn't compare to any benchmark - it just counts green days vs red days.
A win rate above 50% means the fund goes up more often than it goes down. Most equity funds have win rates between 50% and 56%. The magnitude of wins vs losses matters more than the count (a fund can win 55% of days but still lose money if the losing days are bigger).
How We Compute It
Uses daily returns (day-over-day NAV change). A day with exactly 0% return counts as a non-win (not positive).
SQL (simplified)
-- Inside the risk metrics query:
-- 'paired' CTE has: fund_ret for each day
SELECT scheme_code,
ROUND(
COUNT(*) FILTER (WHERE fund_ret > 0) * 100.0
/ COUNT(*),
2) AS win_rate
FROM paired
GROUP BY scheme_code
Worked Example
10 trading days for Fund ABC:
| Day | NAV | Daily Return | Positive? |
|---|---|---|---|
| Mon | 105.20 | +0.48% | Yes |
| Tue | 104.80 | -0.38% | No |
| Wed | 105.50 | +0.67% | Yes |
| Thu | 105.30 | -0.19% | No |
| Fri | 106.10 | +0.76% | Yes |
| Mon | 106.50 | +0.38% | Yes |
| Tue | 105.90 | -0.56% | No |
| Wed | 106.80 | +0.85% | Yes |
| Thu | 106.70 | -0.09% | No |
| Fri | 107.40 | +0.66% | Yes |
Positive days: 6 out of 10.
In practice, win rate is computed over thousands of trading days. Even a small edge (53% vs 50%) compounds significantly over years.
How to Interpret
- Win Rate 54-56%: Typical for strong equity funds. Slightly more green days than red.
- Win Rate 50-53%: Average. About even, but the fund may still perform well if winning days are larger than losing days.
- Win Rate < 50%: More losing days than winning days. The fund relies on a few large winning days to compensate.
Win Rate vs Beat Rate
These are related but different metrics:
- Win Rate: "How often does the fund go up?" (absolute, daily, no benchmark)
- Beat Rate: "How often does the fund beat the market?" (relative, rolling, vs benchmark)
A fund with 55% win rate but 40% beat rate goes up most days but still underperforms the market most of the time. Use both together: win rate for absolute consistency, beat rate for relative consistency.
Important Notes
- Computed from daily returns over the selected evaluation period.
- Does not require a benchmark. Pure fund-level metric.
- Minimum 60 daily observations required.
Related metrics
More Risk Metrics methodology from the MFPRO analytics tool: