And that’s it. You now have a pretty good grounding in how to not only find information on investment funds, but how to analyze that information both quantitatively and qualitatively in order to assess a fund before buying in. Now get out there and put what you’ve just learned into practice – you might just find your next best investment!
In this Pack, you’ve learned:
🔹 An investment fund pools together cash from lots of small investors and places it in the hands of a professional money manager.
🔹 You can search for funds using free online tools such as Investing.com, Morningstar, Portfolio Visualizer, and Trustnet. You can also find more information on specific funds by examining their factsheets.
🔹 To qualitatively analyze a fund, examine 1) the reputation, experience, track record, and alignment of interests of the portfolio manager; 2) the investment team’s experience, structure, and turnover; 3) the fund’s holdings; 4) the fund’s cost.
🔹 After doing a quick sanity check of the fund’s track record, you can quantitatively analyze its characteristics by looking at its historical performance, volatility, Sharpe and information ratios (both of which measure risk-adjusted returns), and maximum drawdown.
🔹 When comparing several similar funds, lean towards those with higher Sharpe and information ratios and lower maximum drawdowns. After you’ve narrowed down a list quantitatively, use qualitative analysis to identify the strongest candidates.
