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The weakest correlation (0.056), which is not a significant correlation at all, is with the Morningstar rating. This is somewhat surprising, because the Morningstar rating presumably takes the fund's historical returns into consideration. However, in any given year the fund may or may not perform according to its track record. This could result in a divergence between the Morningstar rating and total returns.
There are also correlations noted between the type and the NAV and the type and the expense ratio. It should be expected that the latter would hold, because the cost of managing a fund is dependent on the cost of analyzing and trading the securities the fund. It would be expected, for example,...
Morningstar is an external organization, which accounts for the low correlation between its ratings and the internal characteristics of the funds. The return of the fund is more closely related to the type of fund, and with a lesser relationship to the expense ratio. The expense ratio itself is related to the type of fund. These are the factors that are the most significant in driving fund value, and should be taken into account.
When looking at risk, the fund does have a beta higher than that of its large cap blended peers. The beta of the fund is roughly 1.23 as compared with a beta of 1.04 for many of its peers. This can be attributed to the large concentration in financial stocks which tend to have high betas relative to the market. This is to be expected as financial shares raise disproportionately
Mutual Fund Manager Definition of the Fund Manager Position and Major Responsibilities Securities and Exchange Commission defines a mutual fund as a company that pools money from many investors and invests the money in stocks, bonds, short-term money market instruments, other securities or assets, or some combination of these investments (U.S. Securities and Exchange Commission, 2008). Mutual funds are in turn operated by professional money managers, the fund managers, who invest the
98% to 43.72%. The average fund in this category has a mean total return of -0.64% and a standard deviation of 12.23 USAA Precious Metals and Minerals (USAGX), 2009). Another factor that one should look at when contemplating investing in a mutual fund is how much the fund has rewarded shareholders relative to the risk they have taken. One should look at a risk-adjusted measure of performance known as the Sharpe ratio. It
The first aspect of successful mutual fund performance is to define a benchmark. Most funds have specific benchmarks that they use both internally and externally. Externally, the benchmarks are often used in promotional material, relating the performance of the fund to the performance of the Dow Jones Industrial Index or some other broad-based market indicator. Funds operating in specific sectors will benchmark against a sector index. The idea behind
Fidelity Large Cap Stock Fund is a domestic equity fund, comprised of 91% domestics and 9% international equities. As such it is not intended to mirror the performance of either the Dow or S&P 500, but to serve as a competitor product. The foreign stocks are mostly from the UK, Canada, Israel and Ireland. The fund has very little foreign exchange exposure, with 95.91% of the stocks denominated in the
Depository Institutions & Mutual Funds WSJ Article Review In a recent article entitled Advisers Face Barrage of Mutual-Fund Pitchmen, which was published by The Wall Street Journal on March 5th, 2013, financial reporter Corrie Driebusch describes the growing diversity in mutual fund varietals being offered by wealth management firms, as well as the deluge of telephone calls being used by mutual fund wholesalers to court potential brokers. The purpose of the