20 June 2022 4:00

How to read/understand advertised fund performance figures?

How do you read fund performance?

Since you hold investments for different periods of time, the best way to compare their performance is by looking at their annualized percent return. For example, you had a $620 total return on a $2,000 investment over three years. So, your total return is 31 percent. Your annualized return is 9.42 percent.

How do you analyze the performance of a mutual fund scheme?

Attribution Analysis

Step 1: Determine the sector weights for both the fund and the index.
Step 2: Calculate the contribution of each sector for the fund by multiplying the sector weight by the sector return. …
Step 3: Calculate the rate of return for the fund by adding the contribution of each sector together.

How do you read a fund chart?

Quote: In a mutual fund you will want to be sure to read. This fact sheet today we're gonna look at the Vanguard 500 index fund investor shares as the name suggests that comes from the investment.

How do you analyze hedge fund performance?

Investors most commonly evaluate hedge funds by assessing their Sharpe Ratio over a number of years. A Sharpe Ratio measures performance while taking into account the amount of risk to which the investments are exposed.

How do you know if an investment is good?

How to Tell If an Investment Is Good or Bad

Review a stock’s historical price changes over the past 12 months to get a sense of overall performance. …
Calculate the stock’s price-to-earnings ratio. …
Compare the results with the average P/E ratio — approximately 15 — for companies that trade in the S&P 500 Index.

How do you know if a mutual fund is good?

How to Identify the Best Mutual Funds to Invest in?

Identify your Goals. …
Identify you Risk. …
Get your Asset Allocation Right. …
Understand and Analyse Attributes of Mutual Funds. …
Fund Managers’ Past Performance and Experience. …
Seek Financial Advice.

What are performance indicators in mutual funds?

There are five main indicators of investment risk that apply to the analysis of stocks, bonds, and mutual fund portfolios. They are alpha, beta, r-squared, standard deviation, and the Sharpe ratio.

How do you read a mutual fund statement?

It provides you with a complete summary of your mutual fund investments.

Scheme: This will highlight the name of the scheme in which you have invested.
Transaction date: This will mention the date on which a transaction has been done.
NAV: The Net Asset Value or NAV is the price of one unit of the fund.

How do you compare the performance of two mutual funds?

The Right Way to Compare Equity Mutual Funds

a. Compare Long-Term Performance. …
b. Don’t only Look at Returns. …
c. Compare Downside Protection of the Funds. …
d. Compare Fund Performance to the Right Benchmark i.e. Category Average Returns. …
e. Look at each Risk Measure in relation to others. …
f.

What is a good alpha for a hedge fund?

Alpha of greater than zero means an investment outperformed, after adjusting for volatility. When hedge fund managers talk about high alpha, they’re usually saying that their managers are good enough to outperform the market.

What is a good return for a hedge fund?

Average gains of +4.00% lifted YTD average returns to +11.02%, past the level in 2019 (+10.07%) and to the highest level since 2009 (+19.44%). While average returns in 2020 were elevated, there have been several years of similar returns since 2009 (+10% in 2019, +9% in 2017, +10% in 2013 and +11% in 2010).

What is a good Sharpe ratio for a hedge fund?

Usually, any Sharpe ratio greater than 1.0 is considered acceptable to good by investors.

How do you interpret a Sharpe ratio?

The greater a portfolio’s Sharpe ratio, the better its risk-adjusted performance. If the analysis results in a negative Sharpe ratio, it either means the risk-free rate is greater than the portfolio’s return, or the portfolio’s return is expected to be negative.

Is a Sharpe ratio of 0.5 good?

As a rule of thumb, a Sharpe ratio above 0.5 is market-beating performance if achieved over the long run. A ratio of 1 is superb and difficult to achieve over long periods of time. A ratio of 0.2-0.3 is in line with the broader market.

Is a higher Sharpe ratio good or bad?

A Sharpe ratio of 1.0 is considered acceptable. A Sharpe ratio of 2.0 is considered very good. A Sharpe ratio of 3.0 is considered excellent. A Sharpe ratio of less than 1.0 is considered to be poor.

What is a good beta for a portfolio?

A beta value that is less than 1.0 means that the security is theoretically less volatile than the market. Including this stock in a portfolio makes it less risky than the same portfolio without the stock.

What is Apple’s Sharpe ratio?

AAPLSharpe Ratio Chart

The current Apple Inc. Sharpe ratio is 0.05.

What is a good standard deviation for a mutual fund?

Standard deviation allows a fund’s performance swings to be captured into a single number. For most funds, future monthly returns will fall within one standard deviation of its average return 68% of the time and within two standard deviations 95% of the time.

What is r squared in mutual fund?

R-squared is a measure of the percentage of an asset or mutual fund’s performance as a result of a benchmark. Fund managers use a benchmark to evaluate the performance of a mutual fund. For example, a mutual fund might use the S&P 500 as its benchmark index.

How do you interpret portfolio standard deviation?

For example, suppose a mutual fund achieves the following annual rates of return over the course of five years: 4%, 6%, 8.5%, 2%, and 4%. The mean value, or average, is 4.9%. The standard deviation is 2.46%. That means that each individual yearly value is an average of 2.46% away from the mean.

How do you interpret a standard deviation?

Low standard deviation means data are clustered around the mean, and high standard deviation indicates data are more spread out. A standard deviation close to zero indicates that data points are close to the mean, whereas a high or low standard deviation indicates data points are respectively above or below the mean.

How do you tell if a standard deviation is high or low?

The standard deviation is calculated as the square root of variance by determining each data point’s deviation relative to the mean. If the data points are further from the mean, there is a higher deviation within the data set; thus, the more spread out the data, the higher the standard deviation.

What is a good standard deviation?

The empirical rule, or the 68-95-99.7 rule, tells you where most of the values lie in a normal distribution: Around 68% of values are within 1 standard deviation of the mean. Around 95% of values are within 2 standard deviations of the mean. Around 99.7% of values are within 3 standard deviations of the mean.

How do you interpret descriptive analysis?

Interpret the key results for Descriptive Statistics

Step 1: Describe the size of your sample.
Step 2: Describe the center of your data.
Step 3: Describe the spread of your data.
Step 4: Assess the shape and spread of your data distribution.
Compare data from different groups.

How do you analyze and interpret data results?

When you’re dealing with data, it can help to work through it in three steps:

Analyse. Examine each component of the data in order to draw conclusions. …
Interpret. Explain what these findings mean in the given context. …
Present. Select, organise and group ideas and evidence in a logical way.

How do you talk about descriptive statistics?

Oftentimes the best way to write descriptive statistics is to be direct. If you are citing several statistics about the same topic, it may be best to include them all in the same paragraph or section. The mean of exam two is 77.7. The median is 75, and the mode is 79.