The performance of a particular scheme of a mutual fund is denoted by net asset value (NAV). As defined in the AMFI booklet, 'net asset value' is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the [...]
The following points highlight the top eight methods used for determining the variability of return on mutual funds. The methods are: 1. Standard Deviation 2. Sharpe Ratio 3. Treynor Ratio 4. Sortino Ratio 5. Differential Return 6. Jensen's Alpha 7. Appraisal Ratio 8. M2 Measure. Method # 1. Standard Deviation: Standard deviation looks at funds volatility in terms of rise [...]
The investor who invests in mutual fund units can receive returns in the following two ways: 1. Capital Appreciation: Profit earned on sale of units at a higher NAV than the original cost. 2. Income Distribution (Dividend ): When a fund makes a profit on its investment, this profit will be given to investor as a dividend which can be [...]