How to select top 10 Best SIP Mutual Funds to invest in India in 2017
Many of investors simply invest in mutual funds because just they have surplus money. May be because they were guided to invest in mutual funds that are best in the long run as compared to Bank FDs, PPF, RDs, or even LIC endowment products. But here’s the metrics by how you can choose Top Mutual Funds for SIP in India.
Beta: Volatility measure to tell how much the fund changes as a given change occurs in the Index. Lower the beta, lower is the volatility. Therefore, the fund should have lower beta.
Standard deviation: It tells us for a given set of returns, how much fund returns deviate from the average. Lower the standard deviation, lower is the volatility. So, your fund should have lower beta.
Alpha: It is risk-adjusted measure. By taking risks, how much the fund manager generates the return over the benchmark. Higher the alpha, higher is the better performance of the fund.
Sharpe Ratio: Higher the Sharpe ratio better is the performance.
Sortino Ratio: Higher the Sortino ratio, better is the performance.
Treynor Ratio: It is also known as the reward ratio. Higher the Treynor ratio, better will be the performance.
Information Ratio: This is calculated by the average excess return obtained as compared to a benchmark and divides it by standard deviation of excess returns. Higher the information ratio, higher will be the consistency in beating the benchmark.
Omega Ratio: This is a risk-return performance measure of investment asset.
Downside deviation: This is also known as BAD RISK.
Upside potential: This is the absolute opposite of Downside deviation.
R-squared: It is the measure of the correlation of the fund’s NAV movement is with its index.
SIP Returns: How many times a fund’s returns are above index when one invests in SIP.
Lump Sum Returns: For how many times the fund’s returns are above the index when somebody invests in a lump sum.