More to Mutual Fund Investing Than Just Returns
19 अक्तूबर 2023
More to Mutual Fund Investing Than Just Returns
While selecting Mutual Funds, the most common factor used for finalizing investments are historic returns. While returns can be a good measure to judge performance of a scheme, other parameters are equally important while evaluating mutual funds. Let's understand few factors beyond returns which can help us better evaluate MF schemes in detail:
Key factors to evaluate a MF
1. Standard Deviation
Standard deviation measures the investment's risk by quantifying the dispersion of returns from the mean.
2. Beta
Beta measures a mutual fund's sensitivity to market movements, helping investors assess its risk and return potential.
3. Downside Capture Ratio
Downside Capture Ratio assesses a Fund Manager's performance relative to a benchmark during market declines, gauging their ability to limit losses.
4. Sharpe Ratio
The Sharpe ratio in mutual funds assesses risk-adjusted returns, helping investors evaluate a fund's performance relative to its volatility.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. The information provided is generic in nature and is for informational purpose only. Please consult your financial advisor before taking any decision.
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