Financial analysis on mutual fund schemes

Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund.

mutual fund performance analysis excel

This is also generally true for categorizing investors as well as bond securities. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure.

Financial analysis on mutual fund schemes

Also, you will want to see if the fund you are analyzing fits with the other funds in your portfolio. The H exponent is a measure of randomness of NAV series of a fund. Beta Beta , also known as the beta coefficient, is a measure of the volatility, or systematic risk , of a security or a portfolio compared to the market as a whole. Annualised Returns Before selecting a mutual fund, it is very important to examine it from a returns standpoint. The fund with very little holdings is like the small boat at sea that can move quickly but is also vulnerable to the occasional large waves. Mutual funds investing in large companies, such as large-cap stock funds, typically produce higher relative dividends because large companies often pass some of their profits along to investors in the form of dividends. Fund Overlap When adding new funds, be sure you are not investing in an area that you already have in your portfolio. For example, there are stock mutual funds, bond mutual funds, and money market mutual funds. Here is a brief explanation of each of these common indicators. A low turnover ratio indicates a buy and hold strategy for actively-managed mutual funds but it is naturally inherent to passively-managed funds , such as index funds and Exchange Traded Funds ETFs. Simply stated, alpha is often considered to represent the value that a portfolio manager adds or subtracts from a fund portfolio's return. Overlap occurs when an investor owns two or more mutual funds that hold similar securities. R-squared can help investors in choosing the best funds by planning the diversification of their portfolio of funds.

A volatile stock would have a high standard deviation. Therefore costs can be kept extremely low.

fundamental analysis of mutual funds

Correspondingly, an alpha of It is beneficial for potential investors to go through this report to analyze and evaluate a mutual fund scheme and learn the pros and cons of the same. A low turnover ratio indicates a buy and hold strategy for actively-managed mutual funds but it is naturally inherent to passively-managed fundssuch as index funds and Exchange Traded Funds ETFs.

How to study mutual funds performance

For example, a "Growth" objective implies that the fund will hold stocks of companies that are growing. Imagine a Venn diagram with two circles, each representing a mutual fund, overlapping in the center. The fact sheets generally give out information related to following aspects of a mutual fund scheme: a. Fees Mutual funds charge an expense ratio in order to manage your money on your behalf and to run the overall administration of the fund house. A fund with only 20 holdings can be risky on its own, but it may work as one part of a diversified mix of mutual funds within your own portfolio. Mutual fund fact sheets, to this very effect, come in handy for investors to keep track and remain well informed of their mutual fund investments. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure. The excess return of the investment relative to the return of the benchmark index is its alpha. Mutual funds are organized into categories by asset class stocks, bonds, and cash and then further categorized by style, objective or strategy. Treasury Bond from the rate of return for an investment and dividing the result by the investment's standard deviation of its return. They are alpha, beta, r-squared , standard deviation and the Sharpe ratio. Therefore a mutual fund with a growth objective is more tax-efficient because the companies in which the fund invests are paying little or no dividends. For example, try not to have more than one large-cap stock or index fund, one foreign stock fund, one small-cap stock fund, one bond fund, and so on. It is beneficial for potential investors to go through this report to analyze and evaluate a mutual fund scheme and learn the pros and cons of the same. What is a Mutual Fund Fact Sheet?

Outperformance: Fund Return — Benchmark return.

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(DOC) A STUDY ON PERFORMANCE ANALYSIS OF MUTUAL FUNDS FOR THE