The importance of mutual fund analysis and the best assistance for doing it


The importance of mutual fund analysis and the best assistance for doing it

Mutual funds have made investment easy for all of us, isn’t it?

Not all of us are experienced in stock trading. In fact, some of us may feel a little scared about it. Thousands of stock prices going up and down every second can look daunting.

The world of mutual funds is much simpler where a fund manager takes the decisions on our behalf. We simply need to choose a fund we like and invest in it. Then the fund manager takes over, choosing the right asset mix, investing in his choice of stocks and rebalancing it from time to time to deliver profit.

When it comes to investments, we are often advised to do what the famous advertisement quotes as ‘fill it, shut it, forget it.” But in reality, that’s not a good practice, especially if you are a regular investor with an investment portfolio to manage.

Analysing your portfolio from time to time is essential, even if you invest only in mutual funds.

What is mutual fund portfolio analysis?


The process of assessing all the mutual fund investments in your portfolio regularly is known as mutual fund portfolio analysis. This is done to obtain the maximum returns while remaining within your desired risk levels.

Mutual fund analysis involves performing several tasks such as mutual fund technical analysis and fundamental analysis to understand the performance of each of your portfolio constituents so that you can retain the performing funds and remove the non-performing funds.

The importance of mutual fund analysis


Mutual fund portfolio analysis can provide you with valuable insights regarding your mutual fund portfolio. We all want to invest in good quality assets, but many don’t know how to choose them. And a few wrong choices is enough to bring the value of the entire portfolio down. Moreover, the fund that is performing well today, may not perform that well three years hence.

As we mentioned, investing once and forgetting about them does not work in real life, especially to attain long term profit goals. Every portfolio needs to be looked into at regular intervals and rebalanced to obtain the best results.

How to do mutual fund portfolio analysis?


You can perform this task in a variety of ways. Here are a few common ones:

1) Compare the fund to a benchmark


This is one of the best ways for an apple-to-apple comparison. You can compare the returns of your mutual fund vis-a-vis a benchmark to understand whether it is overperforming or underperforming. Which benchmark to choose? That’s easy! Every mutual fund quotes a benchmark in its offer document. You can simply check the performance of that benchmark over a certain period (such as 1-year, 3-years) and compare it to the performance of your fund during the same period.

2) Risk-adjusted returns


Risk-adjusted return is another indicator of the performance of any fund. It depicts the risk and returns trade-off of your investment. Sharpe Ratio is one of the ratios which reflects risk-adjusted returns.

3) Check fund history


Sometimes certain funds go through a bad phase for some duration of time. Does this mean it is a good investment? May not be from the long-term perspective. Hence, taking a look at the fund history can be very useful. It can tell you whether the fund is intrinsically good and has given good returns previously or not. This can also help you identify the reason for the decline in the fund’s performance.

The best site for mutual fund analysis


The methods of mutual fund portfolio analysis can involve a variety of complex tasks such as calculating ratios, looking at data, analysing them and others. Most of us are neither knowledgeable nor equipped for such tasks.

Using an assistant for these tasks can be very beneficial. And that’s why you should use a mutual fund tracking app that can help you with these and much more.

StockEdge is one of the premium stock apps in India which provides a host of benefits for traders and investors of all expertise levels. It is loaded with features that empower you to conduct mutual fund portfolio analysis effectively. It also covers the world of stocks, ETFs and indices extensively. Apart from the mobile app, it has a web version as well.

StockEdge has data about any and every mutual fund in India. It lists mutual funds AMC-wise and asset class wise. This can help you to access all the mutual funds of one AMC with just one click or take a look at all kinds of mutual funds available under one asset class (such as bluechip funds) via a single screen. Alternatively, if you are looking for the details about one scheme, you can also search by entering its name. The app also has a list of all NFOs on offer at any given point in time.

Apart from this, the app lists funds under the Rajiv Gandhi Equity Saving Scheme (RGESS), funds being managed by specific fund managers, fund listing as per custodians and Registrars. Very few apps in India list funds under such a wide variety of lists, one of the main reasons why StockEdge is considered to be one of the best site for mutual fund analysis.

From the mutual fund technical analysis perspective, StockEdge provides end-to-end analysis. It lists tax saving funds, high beta funds, moderate risk funds, international funds, cloning index funds and funds that generate regular income. The app also provides AUM analysis of mutual funds.

When it comes to mutual fund portfolio analysis, the StockEdge app is unparallel. It provides extensive features which are beneficial for both experienced and novice investors.


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