If you are investing in a particular mutual fund scheme, then how should you be able to determine whether the same fund is offering you good returns or not? Indeed, it might have given you higher returns during the last year. However, is it really worthwhile? Just by looking at the individual performance parameter would not answer your query. This could be a common dilemma faced by several investors.
If you wish to truly analyze the overall performance of a particular mutual fund in terms of the expected returns and risk minimization factors, then you can take help of an effective mutual fund performance tracker. While dealing with the mutual fund performance tracker, here are a few pointers that would resolve the investment queries of the investors:
- Scheme versus Benchmark: Each mutual fund is directed to include a benchmark. With the help of the proper mutual fund performance tracker, you should be able to compare the performance of a particular scheme against the list of benchmarks. The comparison of the performance of the scheme along its benchmark would impart a better idea with respect to the overall performance of the scheme.
For instance, in case the scheme has managed to surpass the benchmark, then this reveals that it has performed well. If the scheme has managed to surpass the benchmark by a great margin, then it reveals that the fund manager has some excellent skills for stock picking.
- Scheme versus Category: Now that the particular mutual fund has crossed its benchmark, are you convinced about its performance? You should not be entirely. After the benchmark analysis, you should consider the category average returns for understanding whether the particular fund is an average performer or above it. In addition to this, the investors can also make the comparison of the fund’s performance along with some set peers for figuring out the standing it has under a particular category.
- Check the Portfolio: Another way to make use of the performance tracker is by analyzing the portfolio of the particular mutual fund. You must ensure the fact that whether it is bankable or not. To understand the same, you need to check the portfolio with attention to detail. You must check out the stocks present in the portfolio of the given mutual fund. Then, you can analyze whether the particular stock portfolio is matching the risk profile that you had imagined or not. If you are new to investing, and you have queries about choosing a good portfolio, click here for online guidance regarding this topic.
- Ensure the Ratios: While working with a mutual fund performance tracker, you can also check out the significant ratios in the same. The experts of the mutual funds usually follow the ratios like sharper ratio, standard deviation, alpha, beta, mean, Sortino and so more. You can try learning the basic functions of these ratios. Then, you can set out to compare the various ratios of a particular scheme along with the available peers. This would ensure the current standing of the particular scheme with respect to the peers.
With the help of an effective mutual fund performance tracker, you can analyze various aspects of the same. This would help you in assessing the expected returns that you can get from a particular mutual fund and thus higher profits.