Assessing risk in MF

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M

mrindia

Member
#1
#1
It is advised that while looking throu' fund's performence, one should not only concentrate on annualised returns. Funds risk exposure is also important factor- whether it tumbles sharply in case of correction.
Please somebody explain what is sharpe's ratio? alpha & beta? How these indices are interprated. Should these be taken into account while investing in a Fund?
 
V

Vicky78

Member
#4
#4
value research does most of the stats choose the funds based on the risk you are willing to take.

Sharpe Ratio is a good parameter to evaluate the fund. In large cap funds and plain vanilla equity funds the sharpe ratio is totally sufficient

But in midcap/smallcap funds or more aggressive oppurtunistic funds there are other factors to be considered as well, the way the fund has performed under different fund managers, the size of the fund, recent performace.

For example Sundaram Select midcap has the highest sharpe ratio and has an outstanding track record. But ever since Anoop Baskar left the fund early this year, the fund has not been doing good. Also the size of the fund matters most mid cap funds greater than 2000 crores have not performed well, they lose the ability to aggressively move in and out of different illiquid stocks. One exception to this has been reliance growth. I was initially negative about this fund but it has come out on top this year (Rank 23/150) with an asset base over 5000 crores and having greatest track record.
 
M

mrindia

Member
#7
#7
Thanks a lot.
I have following funds in my portfolio:

Reliance Diversified Power Sec Gr
DSP ML TIGER Gr
Sundram Capex Oportunities Gr
JM Basic Gr

Also maintaining 2 SIPs (1000pm each) in Reliance Gr & Tata Infra Gr.
Plz review my buys. do i need a churning? I can take above average risk & horizon is 3-4yrs.
I am considering to add some of following to my kitty. Plz advise which ones to bet:

Birla sun life frontline equity
DSP ML Equity
HDFC Equity
Kotak Opportuinities
Magnum Contra

Which ones from old folio to be retained & which ones from considered funds be purchased in ur view?
your suggestions vil b of gr8 help
 
V

Vicky78

Member
#9
#9
mrindia said:
Thanks a lot.
I have following funds in my portfolio:

Reliance Diversified Power Sec Gr
DSP ML TIGER Gr
Sundram Capex Oportunities Gr
JM Basic Gr

Also maintaining 2 SIPs (1000pm each) in Reliance Gr & Tata Infra Gr.
Plz review my buys. do i need a churning? I can take above average risk & horizon is 3-4yrs.
I am considering to add some of following to my kitty. Plz advise which ones to bet:

Birla sun life frontline equity
DSP ML Equity
HDFC Equity
Kotak Opportuinities
Magnum Contra

Which ones from old folio to be retained & which ones from considered funds be purchased in ur view?
your suggestions vil b of gr8 help
Click to expand...

Generally never invest in two funds that do the same thing... like the following funds are all infrastructure funds.

Reliance Diversified Power Sec Gr
DSP ML TIGER Gr
Sundram Capex Oportunities Gr
JM Basic Gr
Tata Infra Gr.

Choose one among infra funds preferrably DSP ML Tiger. Among other funds the following five funds would be good for long term (5-10 years)

1. Kotak opportunities or Reliance Growth
2. DSP ML Tiger
3. DSP ML Equity
4. Magnum Contra
5. Birla Sunlife Frontline Equity or HDFC Equity
 
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