Prajna Capital - An Investment Guide

5 points that matter while buying MF More often than not meritocracy of investments is often decided by the returns. Quite simply then a fund generating more returns than the other is considered better than the other. But this is just half the story. What most of us would appreciate is the level of risk that a fund has taken to generate this return? So what is really relevant is not just performance or returns. What matters therefore are Risk Adjusted Returns. The only caveat whilst using any risk-adjusted performance is the fact that their clairvoyance is decided by the past. Each of these measures uses past performance data and to that extent are not accurate indicators of the future. As an investor you just have to hope that the fund continues to be managed by the same set of principles in the future too. Following are the 5 Points: 1. STANDARD DEVIATION 2. BETA 3. R-SQUARED 4. ALPHA 5. SHARPE RATIO 1. STANDARD DEVIATION The most basic of all measures- Standard Deviation allows you ...