Control your personal finance   free website content | contact | privacylink partners
Home » Investing
Money articles

» Personal finance
» Credit cards
» Saving money
» Debt elimination
» Budgeting
» Investing
» Business
» Real estate
» Making money
» Miscellaneous
» Career
» Loans
» Promote your business
» Insurance
» Bankruptcy

» Archive

Attribution analysis explained

By Jakob Jelling
Cashbazar.com

Find out which successes are due to good management.

If you're looking to find the right funds to invest in, you should make sure that you look at all the factors that affect a mutual fund's performance. The fund manager is one of the largest factors - after all, the fund manager is the person who will be making decisions about which companies to invest in.

Attribution analysis is one method that can be used in order to figure out how a fund manager affects the performance of that particular mutual fund. Attribution analysis seeks to find out exactly what can be attributed to the manager - and which successes are based entirely on luck. A highly successful mutual fund will be evenly balanced in so that the right stocks and bonds end up benefiting the fund. These stocks and bonds should also be chosen so that short-term market failures do not have a serious negative effect on the fund's performance.

Attribution analysis can be fairly expensive, especially if the analysis is meant to be thorough. For instance, even for less thorough analyses, every single part of the mutual fund has to be analyzed each day. If the analysis is meant to be more accurate, then it is likely that the fund will need to be analyzed every time that a transaction is carried out by the fund.

The result of this is that attribution analysis is a highly accurate method to determine just how much the success of a mutual fund has to do with the fund manager. However, this is also a very expensive method, and as such, it is not likely to be a reasonable type of analysis for individual investors.

There are also other different forms of attribution analysis available, depending on what factors are going to be analyzed in detail. For instance, it is possible to find out whether or not particular managers will do better or worse depending on the type of market they are working in. Some managers will only do well during up markets, for instance.

Even if you cannot afford an attribution analysis of potential mutual funds that you would like to invest in, you can still make sure that the mutual fund will meet your needs. The best way to do this is to check the mutual fund's history and prospectus before buying into it.

About the author
Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

Search CashBazar

Google
 
Web www.cashbazar.com


Latest money articles

» Controlling the price changes in futures markets
The lock-limit is one way that the markets can be controlled.

» How much will price changes effect stock trading?
Price elasticity is an economics term that refers to the way that price changes of stock can affect the demand for that stock.

» Large volume trading in steps
Program trading is a term that is also used in at least two different (though similar) meanings.

» How many stock options are available?
Open interests are not a feature of all stock market trades. In fact, open interests are calculated based on options and futures trades.

» Protect your portfolio from large losses
If you are worried about the stock market, then you might want to consider portfolio insurances.

» Insure your investment without limiting returns
Are you looking for a way to trade on the stock market without having to deal with all of the risks?

» Regional funds explained
Increase your portfolio diversity with funds from other regions.

» What is a derivative?
Invest in commodities without buying the commodities themselves.

» What is an option?
An option is an agreement that a commodity or stock will be available for purchase at a set date.

» Should I always pay a commission when buying mutual funds
There are three main types of mutual funds when it comes to commissions.

» Find the lowest risk investment portfolio
If you're trying to find a good investment portfolio, then you may want to look at the Treynor measure.

» The difference between PAX World Funds and The World Funds
The first type is purchased through the company PAX, and these funds focus on socially responsible companies.

» The Alpha factor explained
A new method of differentiating between different investments.

» How good is your planned investment
A company prospectus is a legal document that has been filed by the company that you might be thinking about investing in.

» How do I find the best investment advisor?
If you're looking for the best investment advisor for you, you should make sure that you pay attention to the type of investments that that advisor usually recommends.

» How to find the best full-service stockbroker - ask questions
Before you decide who you should choose for your full-service stockbroker, make sure that this is the best option for you financially.

» Investing in commodities
Investing in commodities is not too hard to do - the real problem comes in when you are trying to decide which commodities you should invest in, and when it is better to buy or sell a particular product.

» Don't wait to get your retirement payments!
If you're looking for an annuity, there are a variety of different annuities to choose from.

» Multisector bond funds explained
If you are looking to invest in bonds, but you are not sure that you want to deal with making all of the purchases on your own, bond funds might be the right option for you.

» Private annuity explained
The biggest difference between a regular annuity and a private annuity is that private annuities take place between two individuals, instead of between an individual and an insurance company.

» Avoid estate taxes with a life insurance trust
If you're looking for another way to insure yourself with a life insurance policy that will avoid any taxes after your death, then you should look into getting a life insurance trust.

» What is a Section 1035 policy exchange?
Don't lose insurance money when you change policies.

» Who should consider annually renewable term life insurances?
If you're looking for a good insurance policy, then you should probably take a good look at your financial situation, and at what you can count on being your situation in the future.

» Death benefit only plan explained
If you need life insurance, but you are not able to afford the regular price for life insurance, then you might want to look into a death benefit only plan.

» How to save money on your homeowner's insurance
In the case of homeowner's insurance, the most common way to reduce the amount of money that you will be paying each month is to increase your deductible.


Make money online

Please visit Sitetube.com and learn how to profit from your website.