Mutual Fund sahi h ?

 


How to find suitable investment fund for you?

 Ø  Funds are managed by appointed fund managers (check their previous year performance). Sometimes funds are based on certain theme, in that case keep checking seasonally which stocks are being bought by your fund manager.

Ø  Keep checking on yearly basis that your fund return is higher than benchmark returns after expense ratio of fund (NIFTY 50)

Ø  You must know your plan with fund, then only you can select it and hold for longer period.

Ø  Select only trusted fund house with better risk and liquidity management and client satisfaction rating.

Ø Buy directly from fund manager's website or office and not from other brokers that can help you in saving big amounts in long run.

 

Four mathematical formula are given below, helpful in finding better fund.

·       Standard Deviation

·       Beta

·       Sharpe Ratio

·       Treynor Ratio

 

Standard Deviation: - Standard deviation simply quantifies how much a series of numbers, such as fund returns varies around its mean, or average.

The more a fund's return fluctuate, the greater it's standard deviation.


Beta: - A beta is a statistical tool, which gives you an idea of how a fund will move in relation to the markets. 


Sharpe ratio: - The Sharpe ratio uses standard deviation to measure a fund's risk-adjusted returns. The higher a fund's share ratio, the better a fund's returns towards the risk associated with that fund. Because it uses standard deviation, the Sharpe ratio can be used to compare risk-adjusted returns across all fund categories.

 

Treynor ration: - Treynor ratio shows the risk-adjusted performance of the fund. Here the denominator is the beta of the portfolio. Thus, it takes into account the systematic risk of the portfolio.

A fund with a higher Treynor ratio implies that the fund has a better risk-adjusted return than that of another fund with a lower Treynor ratio.

 

Suggestion:

1) Nifty 50 ETF’s are giving better returns than majority of funds in long run.

2) Along with investing in funds, start investing in your education and experience also.

 

Thank you,

Yachana & Sahil

Comments

  1. Lakshay sainiDecember 19, 2020 at 10:57 AM

    Nice, thank you so much for giving me information.

    👍👍❤️

    ReplyDelete
  2. Lakshay sainiDecember 19, 2020 at 11:00 AM

    I have one question ❓
    These days have many applications for investment. is it good or not specially for beginners.
    Suggest please

    ReplyDelete
    Replies
    1. UnknownDecember 19, 2020 at 7:40 PM

      Every investor is beginner sometime and if they want to invest in a particular investment avenue they must research a bit in order to know the beneficality of that avenue. As for mutual funds, the process is hassle-free and a newbie can start with 500 bucks only. Another advantage is that it provides diversification in portfolio which means that if not one fund do well, another will do and generate returns for you. It seems a good deal and a beginner can for sure invest in mutual funds.It is advisable that you invest through SIP (Systematic Investment Plan), which allows you to pool in a fixed amount of money of your choice at regular intervals.

      Delete

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