A lousy fund can remain a lousy fund forever!!
By Wilfred Ling, The IFA on Duty  •  June 11, 2013
A lousy fund can remain a lousy fund forever!! PDF Print E-mail
Written by Wilfred Ling    Tuesday, 11 June 2013

Look at the chart below. This fund was incepted more than 12 years ago. In all time periods whether it is 12 years, 5 years, 3 years or 1 year period, it underperformed the benchmark (which is MSCI Europe). While I do not advocate frequent trading, it is important to monitor the performance of the fund. The performance of the fund and index is converted to Singapore dollar.

A fund that underperformed for the past 12 years!

How about the risk? In the chart below is a plot of the rolling 3 months weekly annualized volatility of the fund and benchmark. It shows that the risk of the fund is almost identical to the benchmark. Thus, the investor is worst off because he gets a poorer return yet suffers the same risk as the market.

A fund that underperformed for the past 12 years!

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By Wilfred Ling, The IFA on Duty
Wilfred Ling is a Chartered Financial Consultant with Promiseland Independent Pte Ltd. He is a fee-based financial planner by profession.
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