Absolute return is the return that the Mutual Fund houses have given over a specified period. No matter about type of return (returns/gains/losses) that the Mutual Fund provides the absolute return without comparing to any benchmark Index. In other words, Absolute Return and Relative Return both are different from each other, because the absolute return is concerned with the … [Read more...]
Relative Return
Relative returns refer to returns as compared to the market index of the country. The relative return is the difference between the absolute return and the Market Index return. The main object of the Mutual Fund to produce a return that beats the benchmark. Relative return can also be known as alpha in the context of active portfolio management. Let’s explained by Funds … [Read more...]
Trailing and Rolling Returns
There are two ways to get the returns in percentage of mutual funds performance in the current market. Trailing returns Rolling returns Trailing Returns The above-said returns measure the performance of a mutual fund for the past specific periods, such as a one-year, three-year, five-year, or inception-to-date basis. In other words, trailing returns is the calculation of … [Read more...]
Annualized Rate of Return
An Annualized return is the amount of money that has earned for the investor per annum. An annualized return gives a clearer picture when comparing various mutual funds that have traded over different periods of time. However, this is applicable only if investors re-invest their gains every year. In other words, An Annualized return is period returns re-scaled to a period of 12 … [Read more...]
Unit Linked Insurance Plan (ULIP)
ULIP (Unit Linked Insurance Plan) is a type of insurance policy that offers the policyholder to pays an annual or monthly premium. ULIP is a combination of insurance as well as investment. A small amount of the premium goes to secure the life of the investor and the rest of the money is put into investments like stocks, bonds, or mutual funds. The returns on investments depend … [Read more...]