How to Measure Mutual Fund Performance
Upcoming SlideShare
Loading in...5
×
 

How to Measure Mutual Fund Performance

on

  • 547 views

 

Statistics

Views

Total Views
547
Slideshare-icon Views on SlideShare
547
Embed Views
0

Actions

Likes
0
Downloads
20
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    How to Measure Mutual Fund Performance How to Measure Mutual Fund Performance Presentation Transcript

    • How to Measure Mutual Fund Performance Some Images are copyright of  Hemera Technologies, Inc.
    • Agenda
      • Long-Term Investing (Buy and Hold)
      • Some Risk Basics
      • The Importance of Asset Allocation
      • Reading a Mutual Fund Prospectus
      • Mutual Fund Fees and Expenses
      • Analyzing Investment Results
    • Agenda
      • Long-Term Investing (Buy and Hold)
      • Some Risk Basics
      • The Importance of Asset Allocation
      • Reading a Mutual Fund Prospectus
      • Mutual Fund Fees and Expenses
      • Analyzing Investment Results
    • Long-Term Investing (Buy and Hold)
      • Volatility
      • Liquidity and Transaction Costs
      • Dividend Income
      • Market Timing Is Counterproductive
    • Long-Term Investing (Buy and Hold)
      • Volatility
      • Liquidity and Transaction Costs
      • Dividend Income
      • Market Timing Is Counterproductive
    • Long-Term Investing (Buy and Hold)
      • Volatility
      • Liquidity and Transaction Costs
      • Dividend Income
      • Market Timing Is Counterproductive
    • Long-Term Investing (Buy and Hold)
      • Volatility
      • Liquidity and Transaction Costs
      • Dividend Income
      • Market Timing Is Counterproductive
    • Long-Term Investing (Buy and Hold)
      • Volatility
      • Liquidity and Transaction Costs
      • Dividend Income
      • Market Timing Is Counterproductive
    • Market Timing Is Counterproductive
      • RMG Capital Advisors Study
      • Sanford C. Bernstein Studies
      Studies have shown numerous ways market timing can be counterproductive:
    • Market Timing is Counterproductive
      • When is the market going to decline?
      • When do you get back in the market?
      • What will the impact of taxes and transaction costs be?
      Attempting to time the market is futile:
    • Agenda
      • Long-Term Investing (Buy and Hold)
      • Some Risk Basics
      • The Importance of Asset Allocation
      • Reading a Mutual Fund Prospectus
      • Mutual Fund Fees and Expenses
      • Analyzing Investment Results
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
      • Sources of investment risk
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
      • Sources of investment risk
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
      • Sources of investment risk
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
      • Sources of investment risk
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
      • Sources of investment risk
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
      • Sources of investment risk
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
        • Short-term horizon
        • Long-term horizon
      • Sources of investment risk
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
        • Short-term horizon
        • Long-term horizon
      • Sources of investment risk
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
        • Short-term horizon
        • Long-term horizon
      • Sources of investment risk
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
      • Sources of investment risk
        • Systematic risk
        • Nonsystematic risk
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
      • Sources of investment risk
        • Systematic risk
        • Nonsystematic risk
    • Some Risk Basics
      • Standard deviation as a measure of risk
      • Definition of risk
      • Risk of loss
      • Risk of not achieving goals
      • Risk/reward theory
      • Time horizon sensitivity
      • Sources of investment risk
        • Systematic risk
        • Nonsystematic risk
    • Agenda
      • Long-Term Investing (Buy and Hold)
      • Some Risk Basics
      • The Importance of Asset Allocation
      • Reading a Mutual Fund Prospectus
      • Mutual Fund Fees and Expenses
      • Analyzing Investment Results
    • The Importance of Asset Allocation
      • Three primary factors impacting investment performance:
      • Market timing
      • Investment selection
      • Asset allocation
      Cash Stock Bonds T-Bills
    • The Importance of Asset Allocation
      • Three primary factors impacting investment performance:
      • Market timing
      • Investment selection
      • Asset allocation
      Cash Stock Bonds T-Bills
    • The Importance of Asset Allocation
      • Three primary factors impacting investment performance:
      • Market timing
      • Asset allocation
      • Investment selection
      Cash Stock Bonds T-Bills
    • The Importance of Asset Allocation
      • Three primary factors impacting investment performance:
      • Investment selection
      • Market timing
      • Asset allocation
      Cash Stock Bonds T-Bills
      • Studies have shown that over 90% of the performance of a given portfolio is attributable to asset allocation.
      • Less than 10% of performance is due to the choice of individual securities, market timing, transaction costs, and other miscellaneous items combined.
      The Importance of Asset Allocation
    • Agenda
      • Long-Term Investing (Buy and Hold)
      • Some Risk Basics
      • The Importance of Asset Allocation
      • Reading a Mutual Fund Prospectus
        • Contents
        • Profile prospectus
      • Mutual Fund Fees and Expenses
      • Analyzing Investment Results
    • Contents
      • Fee table
      • Investment objectives
      • Financial highlights table
      • Investment advisor and advisor compensation
      • How to purchase and redeem shares
      • Dividends and distributions
      • Miscellaneous services
    • Contents
      • Fee table
        • Sales Commissions
        • Operating Expenses
      • Investment objectives
      • Financial highlights table
      • Investment advisor and advisor compensation
      • How to purchase and redeem shares
      • Dividends and distributions
      • Miscellaneous services
    • Contents
      • Fee table
      • Investment objectives
        • Describes securities used to meet fund objectives
      • Financial highlights table
      • Investment advisor and advisor compensation
      • How to purchase and redeem shares
      • Dividends and distributions
      • Miscellaneous services
    • Contents
      • Fee table
      • Investment objectives
      • Financial highlights table
        • History of Annual Returns
      • Investment advisor and advisor compensation
      • How to purchase and redeem shares
      • Dividends and distributions
      • Miscellaneous services
    • Contents
      • Fee table
      • Investment objectives
      • Financial highlights table
      • Investment advisor and advisor compensation
      • How to purchase and redeem shares
      • Dividends and distributions
      • Miscellaneous services
    • Contents
      • Fee table
      • Investment objectives
      • Financial highlights table
      • Investment advisor and advisor compensation
      • How to purchase and redeem shares
        • Minimum Investment Requirements
      • Dividends and distributions
      • Miscellaneous services
    • Contents
      • Fee table
      • Investment objectives
      • Financial highlights table
      • Investment advisor and advisor compensation
      • How to purchase and redeem shares
      • Dividends and distributions
        • Timing of Dividend Distributions
      • Miscellaneous services
    • Contents
      • Fee table
      • Investment objectives
      • Financial highlights table
      • Investment advisor and advisor compensation
      • How to purchase and redeem shares
      • Dividends and distributions
      • Miscellaneous services
    • Agenda
      • Long-term Investing (Buy and Hold)
      • Some Risk Basics
      • The Importance of Asset Allocation
      • Reading a Mutual Fund Prospectus
        • Contents
        • Profile prospectus
      • Mutual Fund Fees and Expenses
      • Analyzing Investment Results
    • Agenda
      • Long-Term Investing (Buy and Hold)
      • Some Risk Basics
      • The Importance of Asset Allocation
      • Reading a Mutual Fund Prospectus
      • Mutual Fund Fees and Expenses
      • Analyzing Investment Results
    • Mutual Fund Fees and Expenses
      • Fee disclosure
      • Two fee categories
      • Fund expense ratio
    • Mutual Fund Fees and Expenses
      • Fee disclosure
        • Direct Impact on Earnings Potential
      • Two fee categories
      • Fund expense ratio
    • Mutual Fund Fees and Expenses
      • Fee disclosure
      • Two fee categories
        • Sales charges or loads
        • Annual operating expenses
      • Fund expense ratio
    • Sales Charges or Loads
      • Front-end sales loads—Class A Shares
      • Back-end or deferred sales loads — Class B and C Shares
    • Sales Charges or Loads
      • Front-end sales loads — Class A Shares
      • Back-end or deferred sales loads — Class B and C Shares
    • Sales Charges or Loads
      • Front-end sales loads — Class A Shares
      • Back-end or deferred sales loads — Class B and C Shares
    • Annual Operating Expenses
      • Management fees
      • 12b-1 fees
      • Other fees
    • Annual Operating Expenses
      • Management fees
      • 12b-1 fees
      • Other fees
    • Annual Operating Expenses
      • Management fees
      • 12b-1 fees
        • Marketing and Distribution Costs
        • “ Trailing” Commission
      • Other fees
    • Annual Operating Expenses
      • Management fees
      • 12b-1 fees
      • Other fees
        • Administrative Costs of the Mutual Fund
    • Mutual Fund Fees and Expenses
      • Fee disclosure
      • Two fee categories
      • Fund expense ratio
        • Annual Operating Expenses
        • Expressed as a Percentage of the Fund’s Assets
    • Agenda
      • Long-Term Investing (Buy and Hold)
      • Some Risk Basics
      • The Importance of Asset Allocation
      • Reading a Mutual Fund Prospectus
      • Mutual Fund Fees and Expenses
      • Analyzing Investment Results
    • Analyzing Investment Results
      • Performance
      • Expenses
      • Modern Portfolio Theory analysis
      • Ratings
      • Manager longevity
      • Tax efficiency
    • Analyzing Investment Results
      • Performance
        • Past Results Are No Guarantee of Future Results
      • Expenses
      • Modern Portfolio Theory analysis
      • Ratings
      • Manager longevity
      • Tax efficiency
    • Performance
      • Average annual return
      • Consider time period of performance
      • Total return
      • Use average annual returns
      • Use a market index for comparison
      • Use peer performance for comparison
    • Performance
      • Average annual return
        • Average Return Over Time Specified
      • Consider time period of performance
      • Total return
      • Use average annual returns
      • Use a market index for comparison
      • Use peer performance for comparison
    • Performance
      • Average annual return
      • Consider time period of performance
        • Bulls or Bears During Period Listed?
      • Total return
      • Use average annual returns
      • Use a market index for comparison
      • Use peer performance for comparison
    • Performance
      • Average annual return
      • Consider time period of performance
      • Total return
        • Total Return Percentage Over Time Specified
      • Use average annual returns
      • Use a market index for comparison
      • Use peer performance for comparison
    • Performance
      • Average annual return
      • Consider time period of performance
      • Total return
      • Use average annual returns
      • Use a market index for comparison
      • Use peer performance for comparison
    • Performance
      • Average annual return
      • Consider time period of performance
      • Total return
      • Use average annual returns
      • Use a market index for comparison
        • Use Relevant Index for Performance Benchmark
      • Use peer performance for comparison
    • Performance
      • Average annual return
      • Consider time period of performance
      • Total return
      • Use average annual returns
      • Use a market index for comparison
      • Use peer performance for comparison
    • Analyzing Investment Results
      • Performance
      • Expenses
      • Modern Portfolio Theory analysis
      • Ratings
      • Manager longevity
      • Tax efficiency
    • Expenses
      • Expense ratio
        • Money market and bond funds
        • Actively managed stock funds
    • Expenses
      • Expense ratio
        • Money market and bond funds
        • Actively managed stock funds
    • Expenses
      • Expense ratio
        • Money market and bond funds
        • Actively managed stock funds
    • Analyzing Investment Results
      • Performance
      • Expenses
      • Modern Portfolio Theory analysis
      • Ratings
      • Manager longevity
      • Tax efficiency
    • Modern Portfolio Theory Analysis
      • Standard deviation
      • Alpha
      • Beta
      • R-squared
      • Sharpe Ratio
      • Treynor Ratio
      • Standard deviation
        • Deviation Above and Below Expected Return
      • Alpha
      • Beta
      • R-squared
      • Sharpe Ratio
      • Treynor Ratio
      Modern Portfolio Theory Analysis
      • Standard deviation
      • Alpha
        • Better or Worse than Expected?
      • Beta
      • R-squared
      • Sharpe Ratio
      • Treynor Ratio
      Modern Portfolio Theory Analysis
      • Standard deviation
      • Alpha
      • Beta
        • How Volatile Compared to the Market?
      • R-squared
      • Sharpe Ratio
      • Treynor Ratio
      Modern Portfolio Theory Analysis
      • Standard deviation
      • Alpha
      • Beta
      • R-squared
        • How Well Diversified are the Fund’s Assets?
      • Sharpe Ratio
      • Treynor Ratio
      Modern Portfolio Theory Analysis
      • Standard deviation
      • Alpha
      • Beta
      • R-squared
      • Sharpe Ratio
        • Risk-Adjusted Performance Using Standard Deviation
      • Treynor Ratio
      Modern Portfolio Theory Analysis
      • Standard deviation
      • Alpha
      • Beta
      • R-squared
      • Sharpe Ratio
      • Treynor Ratio
        • Risk-Adjusted Performance Using Beta
      Modern Portfolio Theory Analysis
    • Analyzing Investment Results
      • Performance
      • Expenses
      • MPT analysis
      • Ratings
      • Manager longevity
      • Tax efficiency
    • Ratings
      • Caution: Ratings Are No Guarantee for Superior Future Performance!
    • Analyzing Investment Results
      • Performance
      • Expenses
      • MPT analysis
      • Ratings
      • Manager longevity
        • Watch Out for New or Departing Fund Managers
      • Tax efficiency
    • Analyzing Investment Results
      • Performance
      • Expenses
      • MPT analysis
      • Ratings
      • Manager longevity
      • Tax efficiency
    • Tax Efficiency
      • Portfolio turnover rate
        • How Often a Fund Sells Its Underlying Assets
        • High Turnover Is Less Tax Efficient
    • Questions? Thank You