Friday, February 22, 2008

Risks of Mutual Fund


The risk-reward concept is basic in investing. To be successful you must know the level of risk for each investment. The higher the risk, the higher the reward.

I tried to compute this risk-reward by computing the standard deviation of NAVPS of each mutual fund in the Philippines. These mutual fund belong to the growth sector mutual fund. They are mutual funds which invest mostly on stocks or equities.

The higher the standard deviation, the higher fluctuation of NAVPS, hence, higher risk. As can be seen from the table there are two mutual funds which have very high standard deviation.

1 comment:

Seenath Kumar said...

This kind of information really helps investors for keeping track of their investments.
what are mutual funds