Ch.10 · Benchmarks and Performance Evaluation · medium
What is 'Maximum Drawdown' as a risk measure for mutual funds?
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EXPLANATION
Maximum Drawdown measures the largest peak-to-trough NAV decline over a given period. For example, if a fund's NAV fell from ₹100 to ₹60 before recovering, the maximum drawdown is 40%. It helps investors understand the worst-case historical loss they could have experienced, useful for assessing downside risk.
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