Analysing Mutual Fund Performance: A Step-by-Step Guide

The most alluring investment plans that have attracted most investors and are used mainly as a vehicle for diversification of their respective portfolios and benefiting from professional administration of their asset base is in mutual funds. Still, mere investment in mutual funds is not enough; this means that some analysis has to be done on whether more should be invested, reduced, or withdrawn.
In this guide, we will discuss the process of analyzing mutual fund performance, its purpose, advantages, limitations, and give a concrete example of how to evaluate a fund.
Understanding Mutual Funds
Before discussing how mutual fund performance is calculated, some background information on what mutual funds are needs to be given.