New Delhi, Oct. 22 -- When it comes to mutual funds, picking schemes purely based on past returns may not be the smartest move. Returns tell only part of the story. Especially if you're a do-it-yourself investor, your research should go one step further-to the ratios hidden in fund factsheets. These metrics reveal how well a fund performs relative to risk, cost, and conviction.

Returns in isolation don't say much-you need to see how the fund fares against its benchmark. Alpha measures a fund manager's skill in generating extra returns over what's expected for a given risk level.

A positive alpha means the manager has beaten the benchmark, while a negative one signals underperformance. Consistent alpha generation reflects the active mana...