Ch.10 · Risk Measures and Ratios · medium
What is the ideal framework for evaluating a mutual fund before recommending it to an investor?
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EXPLANATION
A comprehensive fund evaluation framework covers: (1) Scheme category matches investor's goal and horizon; (2) Consistent long-term performance vs benchmark and peers across rolling periods; (3) Risk-adjusted metrics (Sharpe, standard deviation, max drawdown); (4) Fund manager experience and tenure; (5) AUM size and growth trend; (6) Expense ratio (lower is better for same category); (7) AMC's reputation and compliance record.
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