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Unit trust performance measurement: the snail trail approach

Unit trust is an investment scheme that offers investors a well diversified portfolio managed by a professional fund manager or organisation. The investment horizon is medium to long term depending on the stipulated objective of the unit trust. Due to the long holding period and compounding effect,...

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Main Author: Tan, Yen Keng
Format: Article
Language:English
Published: Universiti Putra Malaysia Press 2000
Online Access:http://psasir.upm.edu.my/id/eprint/3318/1/Unit_Trust_Performance_Measurement.pdf
http://psasir.upm.edu.my/id/eprint/3318/
http://www.pertanika.upm.edu.my/view_archives.php?journal=JSSH-8-2-9
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spelling my.upm.eprints.33182015-09-10T10:56:03Z http://psasir.upm.edu.my/id/eprint/3318/ Unit trust performance measurement: the snail trail approach Tan, Yen Keng Unit trust is an investment scheme that offers investors a well diversified portfolio managed by a professional fund manager or organisation. The investment horizon is medium to long term depending on the stipulated objective of the unit trust. Due to the long holding period and compounding effect, a slight difference in the annual rate of returns can be very detrimental to the investor. Therefore the performance of a unit trust as well as the fund manager must be carefully evaluated before committing to the fund. As we know, a high rate of returns in a single period can be very misleading if we do not study the volatility of the historical returns. Risk adjusted returns offer a solution to this problem, but this is only a "snapshot" performance measurement analysis. Snail-Trail analysis was introduced to overcome these drawbacks and better portray the dynamic history of fund manager's performance. 17 equity growth funds were selected for the purpose of this study. From the snail-trail analysis, two promising unit trusts were found to be Asia Progress and KLMF Growth. Both funds have shown improvement in relative performance from the "high return high risk" and "low return low risk" quadrant moving up to "high return low risk", the most favourable, quadrant. Meanwhile, three funds have been classified as below average as the snail trail diagrams shown deteriorating performance. These three funds are BHLB High Growth, KLMF Industry, and KLMF Aggressive Growth, the performance of which has been falling rapidly over recent years,from the "high return low risk" quadrant to "low return high risk" quadrant. Four unit trusts showing the most consistency in fund risk-return performance are SBB Premium Capital, HLB Growth, OSK Equity and RHB Capital. Universiti Putra Malaysia Press 2000-09 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/3318/1/Unit_Trust_Performance_Measurement.pdf Tan, Yen Keng (2000) Unit trust performance measurement: the snail trail approach. Pertanika Journal of Social Sciences & Humanities, 8 (2). pp. 103-104. ISSN 0128-7702; ESSN: 2231-8534 http://www.pertanika.upm.edu.my/view_archives.php?journal=JSSH-8-2-9
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description Unit trust is an investment scheme that offers investors a well diversified portfolio managed by a professional fund manager or organisation. The investment horizon is medium to long term depending on the stipulated objective of the unit trust. Due to the long holding period and compounding effect, a slight difference in the annual rate of returns can be very detrimental to the investor. Therefore the performance of a unit trust as well as the fund manager must be carefully evaluated before committing to the fund. As we know, a high rate of returns in a single period can be very misleading if we do not study the volatility of the historical returns. Risk adjusted returns offer a solution to this problem, but this is only a "snapshot" performance measurement analysis. Snail-Trail analysis was introduced to overcome these drawbacks and better portray the dynamic history of fund manager's performance. 17 equity growth funds were selected for the purpose of this study. From the snail-trail analysis, two promising unit trusts were found to be Asia Progress and KLMF Growth. Both funds have shown improvement in relative performance from the "high return high risk" and "low return low risk" quadrant moving up to "high return low risk", the most favourable, quadrant. Meanwhile, three funds have been classified as below average as the snail trail diagrams shown deteriorating performance. These three funds are BHLB High Growth, KLMF Industry, and KLMF Aggressive Growth, the performance of which has been falling rapidly over recent years,from the "high return low risk" quadrant to "low return high risk" quadrant. Four unit trusts showing the most consistency in fund risk-return performance are SBB Premium Capital, HLB Growth, OSK Equity and RHB Capital.
format Article
author Tan, Yen Keng
spellingShingle Tan, Yen Keng
Unit trust performance measurement: the snail trail approach
author_facet Tan, Yen Keng
author_sort Tan, Yen Keng
title Unit trust performance measurement: the snail trail approach
title_short Unit trust performance measurement: the snail trail approach
title_full Unit trust performance measurement: the snail trail approach
title_fullStr Unit trust performance measurement: the snail trail approach
title_full_unstemmed Unit trust performance measurement: the snail trail approach
title_sort unit trust performance measurement: the snail trail approach
publisher Universiti Putra Malaysia Press
publishDate 2000
url http://psasir.upm.edu.my/id/eprint/3318/1/Unit_Trust_Performance_Measurement.pdf
http://psasir.upm.edu.my/id/eprint/3318/
http://www.pertanika.upm.edu.my/view_archives.php?journal=JSSH-8-2-9
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score 13.211869

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