Chapter 14: Understanding Mutual Fund Performance

In this section

• How is Portfolio Performance Evaluated?
  Learn how mutual funds and portfolios measure and report performance, focusing on rates of return, benchmarks, risk management, and regulatory considerations. Explore practical examples, case studies, and best practices in analyzing short-term versus long-term performance.
• How is Performance Assessment Conducted?
  Learn how to evaluate mutual fund performance using both quantitative and qualitative approaches, including ratio analysis, performance attribution, and manager evaluation techniques.
• How is a Comparison Universe Used? Understanding Mutual Fund Performance in Canada
  Discover how a comparison universe helps Canadian investors gauge mutual fund performance relative to peers, ensuring fair and accurate evaluations of investment returns.
• How is Quartile Ranking Used?
  Learn how quartile rankings categorize mutual funds based on performance, helping investors and advisors quickly gauge a fund’s relative standing against its peers.
• Risk-Adjusted Performance Measures
  Explore key risk-adjusted metrics such as the Sharpe Ratio, Sortino Ratio, and Information Ratio to evaluate mutual fund performance effectively.
• Time-Weighted vs. Money-Weighted Returns
  Explore the key differences between Time-Weighted and Money-Weighted Rates of Return, discover real-world applications, and learn how Canadian regulations guide their use in mutual fund performance assessments.
• Common Pitfalls in Performance Evaluation
  Explore how short-termism, ignoring fees, and poor benchmark selection can undermine proper mutual fund performance evaluation, with practical tips and Canadian regulatory insights.
• Regulatory Guidelines and Reporting Standards
  Explore key Canadian regulatory guidelines, performance reporting standards, and essential disclosure documents for mutual funds under National Instrument 81-101, CIRO guidelines, and CSA frameworks.