Alpha And Beta Metrics: Explaining How They Can Help Mutual Fund Investors

Yet, despite the surge in retail participation, the criteria investors use to choose schemes tends to remain simple as investors often rely on informal recommendations, word-of-mouth advice or past 1-year, 3-year, and 5-year annualised returns. While these methods are helpful for making an investment decision, trailing returns do not always give the complete picture of risk and reward associated with a specific mutual fund scheme.