A draft mutual fund advertisement says Our fund returned 42% last year, with no benchmark, no standard periods and no risk statement. Rewrite it within the rules on performance advertising and explain each change.

Replace the single 42% with returns for 1, 3 and 5 years and since launch, each beside the scheme benchmark and a broad market index, as compound annual rates and as the value of Rs 10,000, dated and for a named plan, with the standard risk statement and riskometer. The rewrite shows the fund ahead of its benchmark over one year but behind it over three, five and ten. That less flattering picture is exactly what the rules exist to show.

A restaurant that advertises one perfect review from one night, out of three years of meals, is not lying about that night, but it is misleading you about the restaurant. A single good year shown alone misleads, which is why performance advertising rules require standard periods, a benchmark and a risk statement. The draft has five problems: no benchmark, so 42% has nothing to be judged against; one period chosen because it flatters; no date or plan; no compound annual growth rates or rupee values over the standard periods; and no risk statement or riskometer.

Show each standard period as a compound annual growth rate for the fund, its scheme benchmark and an additional broad market benchmark, and as the value today of Rs 10,000 invested at the start. Name the plan, since regular and direct plans have different returns, and state the as-of date. SEBI's advertising code and its performance disclosure format set these requirements; confirm the current version, including whether the performance of other schemes run by the same manager must also be shown.

Read honestly, the fund had one excellent year inside a decade of slightly lagging its benchmark: since launch, Rs 10,000 grew to about Rs 33,646 against Rs 34,551, about Rs 905 less. It still beat the broad market index over every period, which is a fair point to make, so the rewrite does not need to bury the fund; it needs to stop hiding the comparison.

Add the standard mutual fund risk statement in the prescribed size and wording, the scheme's riskometer, and a line that past performance may or may not be sustained in future. Remove grow your wealth, which implies a return, and keep the call to start an SIP neutral. Keep a file note of why each change was made, because the ad will be reviewed again when the next quarter's numbers arrive and the one-year figure looks different.