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Mutual Fund performance measurement with Standard Deviation

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Our source of information is from the fact sheet

First let us see *Standard Deviation*

Standard deviation is a statistical measure of the *range* of an investment’s performance.

When a mutual fund has a high standard deviation..

it means its range of performance is wide

that means the scheme will have greater volatility.

Standard Deviation of 18.72%

That is the example of DSPBR Equity scheme we discussed yesterday

From the fact sheet

Now if i take another scheme and compare, i can get to know which one will have greater volatility

For instance, i take ICICI Prudential Value Discovery Fund - Direct Plan which has 17.2

so comparatively, DSPBR, being 18.7 will have greater volatility over ICICI Prudential Value Discovery Fund

If grater volatility is there, our predictibility of returns will be less got it?

Typically what value is high when it comes to SD?

Or it should only be seen in comparative way

Mostly used comparatively between two schemes or within the same scheme for different period - like from June and July fact sheets

In general, Equity-oriented funds have higher SD because equity shares are more volatile.

Debt-oriented funds have less SD, like 1% or 2%, because debt securities are not that volatile and give fixed returns.

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