Personal Finance & Money Asked by Robby on August 8, 2020
I’m new here and wondering how best to choose between two (or more) active funds for personal investment (on the basis of common information that funds must disclose). For example, I tried to calculate the Sharp-Ratio: I divided the geometric means of the returns over 3 years (fund A: 16.66%; fund B: 13.73%) by the given volatility over 3 years (A: 17.5%; B: 17.73%), which gives me values of 0.952 and 0.774 (A is better). Another thing I did is to look at the given maximal drawdown (or loss) over 3 years (A: -18.7%; B: -30.81%) (A is better). Now, maybe it would be better to compare longer periods (10 years?) but for this period only the annual returns and no volatility/ drawdown etc. are given. Is it possible to calculate them by oneself or how could I proceed for choosing between funds? I would be very happy about your suggestions.
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