POSTED BY December 22, 2011 10:37 am COMMENTS (8)ON
I am a new bee to the world of investing and mutual funds. Thanks to Manish for educating many people towards the importance of investing early.
I have gone through the information and comments provided by users on this forum and followed valueresearchonline as indicated by Manish in Mutual funds selection process.
I have compared UTI-Oppurtunities and HDFC Top 200 Growth fund, both funds belong to the category Large-Mid Cap as per Value research online website.
Just by looking the last three years performance, UTI oppurtunities has done better than HDFC Top 200. And apart from the returns below are the parameters which i looked at:
R Squared value for UTI is 0.92 and for HDFC Top 200 its 0.95, considering the difference of 0.03 small, alpha of 10.02 for UTI appears to be better than 6.57 for HDFC Top 200, meaning UTI risk adjusted returns are better than HDFC Top 200. Also beta for UTI is 0.86 and for HDFC its 0.94 so when markets are falling, UTI might loose less than HDFC.
Standard deviation for HDFC is more at 25.77 and for UTI its 23.87. So HDFC is better when fund is giving possitive returns but not that good during negative returns. Also Sharpe ratio is better for UTI.
The P/B ratio for UTI is 6.15 and HDFC is 3.99 and P/E ratio for UTI is 21.49 and for HDFC its 18.50, they seem to be in favor of HDFC top 200. From P/E definition – The investor might have to pay less amount in HDFC top 200 fund for same amount of returns that they might get from UTI.
Using all these parameters and from the last three years performance, i am little bit inclined towards UTI Oppurtunities fund.
Friends please let me know if i am following the parameters correctly or do you think i am missing something while analyzing funds. Your help is really appreciated.