1. Performance Ratios:
Sharpe Ratio: Measures risk-adjusted returns.
Example: A fund has an average return of 12% and a risk-free rate of 5%. Its standard deviation is 10%.
Sharpe ratio = (12% - 5%) / 10% = 0.7.
Alpha: Indicates excess return compared to benchmark.
Example: A fund with an alpha of +2% has outperformed its benchmark index by 2%.
Beta: Measures sensitivity to market movements.
Example: A fund with a beta of 1.2 indicates it is 20% more volatile than the market.
2. Risk Ratios:
Standard Deviation:Measures volatility of returns.
Example: Fund A has a standard deviation of 15%, indicating higher volatility compared to Fund B with 10%.
Sortino Ratio: Evaluates downside risk.
Example: Fund X has a Sortino ratio of 1.5, showing better risk-adjusted returns compared to Fund Y with a ratio of 1.0.
3. Expense Ratios:
Expense Ratio: Annual fee charged by the mutual fund.
Example: Fund Z has an expense ratio of 0.75%, meaning investors pay ₹0.75 annually for every ₹100 invested.
4. Liquidity Ratios:
Turnover Ratio:Frequency of buying and selling securities.
Example: Fund P has a turnover ratio of 80%, indicating its portfolio turnover is 80% of its assets annually.
5. Yield Ratios:
Dividend Yield: Percentage of NAV distributed as dividends.
Example: Fund Q has a NAV of ₹1,000 and distributes ₹50 annually as dividends. Dividend yield = (₹50 / ₹1,000) * 100 = 5%.
6. Portfolio Composition Ratios:
Sector Allocation: Distribution across different sectors.
Example: Fund R allocates 30% to technology, 20% to healthcare, and 50% to financial sectors.
Asset Allocation: Distribution across asset classes.
Example: Fund S allocates 60% to equities, 30% to bonds, and 10% to cash equivalents.
7. Performance vs. Benchmark:
Tracking Error:Measures deviation from benchmark.
Example: Fund T has a tracking error of 2%, indicating its performance varies by 2% from its benchmark index.
*These ratios provide insights into various aspects of mutual fund performance, risk, expenses, and portfolio characteristics.