Qualitative Methods focus on the detailed description of the situation, events and people to infer conclusions. Qualitative Methods are useful in determining the Future prospects of the Fund.
Investment Team: The future returns of the fund are largely dependent on the investment decisions that a fund manager makes, thus an experienced fund manager is one of the most important criteria for any fund.
Investment strategy and Process: answers the question of where and how is the fund going to manage its investor’s money. It is a critical part of the selection process as it states which fund has been able to implement a successful strategy and generate an Active return out of it.
Investment Mandate: It is a set an of instructions for the fund manager to make investments. Any unique provision in the mandate that enables the fund manager to generate more returns are preferred.
Transparency: of the fund’s house
The Quantitative Analysis parameters are used for picking top mutual funds
Quantitative Analysis uses numbers for interpretation data and involves statistical analysis. Funds Historical data is evaluated incorporating various parameters to shortlist the top performers.
Stability of Returns: Historical performance of the fund is checked in different market conditions.
Quartile Ranking: Funds Quarter on Quarter Performance is ranked and checked for consistency.
Peer Group Average: Funds performance is compared to its Peer Group to evaluate its position.
Standard Deviation: measures the volatility of the fund’s returns in relation to its average. It tells how much the fund’s return can deviate from the historical mean return of the scheme.
Sortino Ratio: The return value can go both upwards and downwards from its standard value. This is called deviation. Sortino Ratio only considers downside deviation as a risk as the upward deviation is beneficial for the investor. This gives us a fair value of returns per unit of risk.
Active Return: Returns excess over benchmark are called Active Returns. They largely Depend on the Fund Managers Selection Strategies.