How is the Net BFM Score calculated?
The BFM score is calculated in two steps - first, the monthly BFM score/rank is calulated. Then the Net BFM Score/Rank is calculated. The scores are updated on the first of every month.Monthly BFM Score
The gain in NAV for four periods is calulated. The four periods are past 3 months, between 3 months and 6 months, between 6 months and one year, and, between one year and two years. They are extrapolated (if necessary) to find their 1-year yields and given weightages of 3, 1, 2 and 4 respectively. The weighted average gives the BFM Score, and from it, the BFM rank for the week.Net BFM Score
Every month, the difference between its Week BFM Score and that of a NIFTY index (we use ICICI Prudential Index fund) is calulated. The average of this between the periods between 3 months and 9 months from the current week gives the Net BFM Score. From this the Net BFM rank too is calculated.In effect, the performance in the past 3 months do not affect the Net BFM Score - it looks at the long-term consistency. However, its monthly rank will be affected. If a fund's monthly rank falls over 100, it means its current performance has taken a hit. Such funds need to be carefully watched.