Knowledge Tree
mutual fund
Facts (11)
Sources
Risk Return Trade Off - Meaning, Importance and Example bajajfinserv.in 6 facts
measurementA Sharpe ratio of 1.5 is considered a strong indicator of a mutual fund's performance relative to the risk accepted.
claimThe Beta ratio measures a mutual fund's sensitivity to market movements, where a beta of 1.2 indicates the fund is 20% more volatile than the market, and a beta less than 1 indicates the fund is more stable than the market.
claimThe Alpha ratio measures the performance of a mutual fund relative to its benchmark index, such as the Nifty 50 or Sensex, where a positive value indicates the fund outperformed the benchmark.
claimThe Sharpe ratio evaluates whether a mutual fund's returns are commensurate with the risk taken, with a higher ratio indicating better risk-adjusted returns.
claimInvestors evaluate mutual fund efficiency by comparing returns relative to the risk taken, identifying that a fund taking more risk for the same return as another is less efficient.
claimApplying the risk-return trade-off helps investors build a well-diversified mutual fund portfolio, set realistic financial expectations, and avoid panic during market volatility.
An Exploratory Study of the Wealthy's Investment Beliefs ... financialplanningassociation.org Mar 1, 2025 2 facts
claimSeparately managed accounts are generally considered more tax-efficient than mutual funds and, along with ETFs, are becoming preferred vehicles for wealthier investors, according to Hearts & Wallets (2023).
claimThe survey instrument for 'An Exploratory Study of the Wealthy's Investment Beliefs' asked mutual fund or ETF owners to describe their mindset regarding active versus passive investment styles.
The 7 Founding Principles of Personal Finance - MoneyandMe pgimindia.com 2 facts
A Complete Guide to Investment Vehicles | Money for The Rest of Us moneyfortherestofus.com Oct 2, 2025 1 fact
formulaThe net asset value (NAV) of a mutual fund is calculated by taking the market price of a fund's assets, including cash, subtracting any liabilities, and dividing by the number of shares outstanding.