Important mutual fund metrics when picking mutual funds

So far in the series, we've discussed equity and debt mutual funds, how they work, and the risks. Putting all this together, once you get down to building your portfolio, you need to analyze funds before investing in them. So, the question is how do you pick mutual funds? Picking mutual funds is as much an art as it is science. There's no one guaranteed way to pick funds. But if you invert that question, whenever you are analyzing funds, you need to look at certain key metrics to evaluate them. In this video, Karthik explain key ratios like beta, alpha, and Sharpe ratio that are important when you're analyzing funds.

[kingharji]

Benchmark (95 Marks in physics vs 93 Marks)
Beta (less than 1)
Alpha (Higher the alpha the better it is)
Standard Deviations (Less is best)
Sharpe Ratio (Higher it is higher returns we get) Only use in Equity MF
Capture Ratio

[rajun]

Karthik rangappa is one of the Best guru of stock market and finance in India....his varsity is just amazing, even school children can understand it such a nice presentation....keep it up, 👍

[shashankraj]

Most appropriate video for mutual fund investors...many thanks for this series.

[rhythm.]

I think there is a mistake in the brackets. Correct calculation is:
(10% - 4%) - {(7% - 4%) x .75}
= 6 - (3 x .75)
= 6 - 2.25
= 3.75

[anaesthesiabootcamp]

Very useful info. One doubt. You said alpha = {(MFR - RFR) - (BMR - RFR)} × beta. So effectively this looks like (MFR-BMR)×beta (Basic algebra).  So cannot find the significance of Risk-Free Rate here.
Also in the given example, putting values in formula
{(10-4)-(7-4)}x0.75 = 3x0.75 = 2.25 and not 3.75!!!!

[sandiphalder]

Info Ratio(IR) is better metric with regards to Capture Ratio(CR) as it includes the Upside CR of any fund. Thus higher the IR the better the fund.

[m_chael]

Thank you for these videos! Would love to see a video on Analyzing Debt Mutual Funds.

[PramodKumar-qbmv]

'The Black Swan' written by Nissim Nicholas Taleb explores some of these ratios in a very interesting & enlightening way.

[lakshminarasimhannarasimha]

Very nice video,
Just curious to know are you still in touch with those two guys.
Has the mindset changed or does it remains the same😊

[mohdkashif]

So many fake fin-influencers selling their course and never gave this much in depth information

[dejavu]

People say not to look at historical MF returns but then suggest using these metrics (Sharpe, Treynor, etc.) which use historical MF returns anyways

[tamilkeerthi]

Zillion thanks for all the commendable work.

[abhishek-endj]

is the calculation of 3.75% correct ? as per the formula it should be = 2.25%

[Sandeesh_Srikantam]

In the next video, while analysing the funds please consider trynor ratio also. Or let us know why you gave it a skip.

[shubhampatel]

Can you please make a video about CFA certification ? Like what are the opportunities and growth (especially for an engineering background)

[amritmalhi]

god bless your app but I have a doubt. If unfortunately your app closes permanently due to some reason while i have my money invested through your app. What will happen to my capital?

[RahulSharma-cmct]

Generally what is sharpe ratio value of good growth funds?

[varunmehra]

Ho zerodha can you plz suggest if this measure can be considered for futur selection as the data used is historical return to calculate ratios..

[financialfreedom]

Downside capture ratio should be Minimum, so out if 100 what is the ideal number ?

[financialfreedom]

Down side capture should be less then 100 or more then 100?