How is the performance of an investment fund assessed

Funds - basic knowledge

How do you recognize good funds?

Undoubtedly, relative performance is a crucial factor in evaluating the quality of an investment fund. However, to base the assessment solely on the average performance in the past and to always invest in the fund that tops the performance ranking is definitely not enough. In addition to the return, the risk of a fund, expressed by its volatility, as well as the portfolio composition must be taken into account. Compared to competitors in the same class, good funds always show a relatively steady performance.

A long history of funds and fund management can also be seen as an indication - if not as evidence - of a high-quality investment product. Bad managers usually struggle with cash outflows. Sooner or later the corresponding fund will therefore be discontinued, which inevitably speaks in favor of investment concepts that have held their own in the market for many years, sometimes even decades. Their strategies do not have to be antiquated, after all, a long survival time can also result from a high level of adaptability and experience, as well as the successes that result from them.

The easiest and probably safest way to filter out the best of an investment category from the large number of funds approved in Germany is to rely on the judgments of rating agencies when making your selection. Various quantitative and qualitative factors flow into their evaluation processes, most of which are not available to private investors or which they are unable to evaluate.

Get an overview of the top performance funds of all types of funds
Top performance fund