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Look beyond the numbers when assessing fund performance

It is important to assess a fund's performance figures in the right context
Look beyond the numbers when assessing fund performance

When deciding whether to invest in an active fund, you need to look at performance. However, it is important that you evaluate it in the right context.

Make sure that the fund is outperforming relevant benchmarks and not just turning out good numbers because the area it invests in is going up. Also look at periods when the asset the fund invests in has not done well and if the fund did better, for example, by falling less than relevant benchmarks or making a positive return when they were falling.

Good returns might not be repeated. For example, does the area the fund invests in have a good outlook? Conversely, if the fund and the area it invests in have not done well is the outlook for this area looking better meaning that performance could turn up?

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