DSIJ Mindshare

Drawdowns are a natural part of investing in mutual funds. While they can test investor patience, history shows that funds with strong fundamentals and a disciplined approach tend to recover and generate long-term wealth. This article explores the lessons we can learn from mutual fund volatility and how managing drawdowns is the key to achieving long-term financial goals 

Unlike static allocation strategies, balanced advantage funds (BAFs), also known as dynamic asset allocation funds, actively rebalance portfolios to suit changing market conditions. If the equities are overvalued, the managers might reduce equity exposure and allocate more to bonds or alternative investments. Also, if certain assets appear undervalued, the managers might increase exposure to these assets expecting mean reversion. The article explain the financial benefits that can be derived from such funds 

When it comes to evaluating the performance of mutual funds, two important terms often come up: absolute returns and compound annual growth rate (CAGR) returns. Understanding these two metrics is crucial for investors to make informed decisions about their investments. While both measure the growth of investments, they do so in different ways. The article explains the methodologies and how they benefit the investors 

We often give importance to a stock’s PE ratio, and sometimes investors make buy or sell decisions based on it.