How do you assess the performance of different mutual funds?

Question

When usually each one is better than the others over different periods? And what is the best period to consider?

Answer 1

I don't go back that long ... 2 years is too long, and several factors may have its part in the fund's performance.

When picking up MF, I just look for the top performing fund the last 3 to 6 mos. A year at the most. Chances are, the manager, money invested in, etc. are still the same.

Take for example, last November, I noticed that DPCAX was performing fantastically. (At yearend '06 it made some 62+% including dividend!). I bought some of it before the year is over. So far, YTD it made 34+%. The slowest performer I had this year made 10+%. I just dropped it last month in favor of another one. So far this new one made 4+% for me. I don't mind paying load if its
performance "guarantees" (as latest data shows) I can get more back.

I do the same on stocks. Watch for the breakers, those that always hit a new highs. That trend does stop abruptly. Choice the one with low P/E. If possible too, prefer the one that gives dividend.

Another way (on stock), is look for a loser big company (say Ford), whose stock doesn't negatively react any further on any bad news about it. It may have reach its bottom. Changes are, it's on its way up. It happened to me several times - most notable were Chrysler and Caterpillar.

Answer 2

When it comes to mutual funds, long term performance is the focus. 3-5 year track records are best to look at. But also consider other factors, for example, how long has the fund manager been managing the fund, its pointless to look at the fund's 10 year track record if the fund manager has only been on the fund for 4 years. Also look at the fund manager's track record. If the fund manager is new to the fund but ran another fund with a steller record for 10 years take note. A great source for information on how a fund has done is morningstar.com. They rate a fund and give some peer analysis. Performance isn't always the best way to measure. Look at performance vs. risk, if a fund takes a lot of risk to get performance it may not be the right investment for everyone. I highly recommend Morningstar as a resource for fund analysis. www.morningstar.com

Answer 3

Consider a time period in excess of 5 years! Consider their Morning Star Ratings? The length of time that the Money Manager has been with the Mutual Fund Firm? Consider if its a No Load or a Load Fund and what types of fees are you paying to get professional money management? You may want to consider investing merely with an INDEX FUND versus a Mutual Fund to get a best investment at this time in the market place and GOOD LUCK! :-)

Answer 4

it is different for different countries
go out to the elder people on the streets, ask them about their investments, then take your decision
there are some points like - entry load and exit load and block period of your investment, fine upon non payment of your instalment - this is where these funds earn a lot, and the percentage return they showed you better than others get cut out here

Nota Bene! - fund history of 3 or 5 or 10 years is irrelevant because - the world markets are very volatile and unstable, even bank and govt interest rates are unstable, and no one is doing good nowadays.

it is like buying a car - the only difference is how much are they going to charge for maintainance and etc (abovementioned points)
the only fund which is actually investing worldwide is FEIDELITY fund - search upon this word on the net

Answer 5

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Answer 6

To really assess performance of mutual funds (i.e., assess it on a style-adjusted basis), you need a decent data library and a solid understanding of quadratic programming.

Answer 7

look a few years back (3-5)

Answer 8

If you know enough to ask that question, you're phishing.