What is "modified duration"?
Modified duration - for a portfolio of fixed income instruments represents the approximate percentage change in portfolio value due to change of 1% of all fixed income returns, which are part of the structure of that portfolio. For example, if a fund has a Modified duration indicator value of 1, an increase of 0.5% in market returns for all instruments in the fund, would lead to a decrease of funds unit value of approximately 0.5%.
What is Value at Risk - VaR-?
Risk (Value at Risk, abbreviated VaR) - indicates the maximum loss that can be recorded by the unit value of that fund in a period of time and with a certain probability in normal market conditions. Based on international practice, this indicator is calculated during the length of one year, with the probability of 95%.
How are classified and how to choose a fund?
Knowing that open-ended funds invest their assets in: money market instruments, municipal and/or corporate bonds, shares traded on stock market and other securities permitted by the regulatory authority and that each of these instruments involves a degree of risk, this ensue that investments in a open-ended investment fund has a associated level of risk.
Usually, optaining performance is closely related to the assumed risk, thus at a low risk level the performance will also be low and at a high risk level the obtained performance can be high.
Depending on how the assets are invested (portfolio structure), open-ended funds are grouped into four categories, each category being associated with a certain degree of risk as follows:-
How to access data for UCITS funds sold in Romania?
Available only in Romanian
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How to access data non-UCITS funds sold in Romania
Available only in Romanian
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How to access data SIFs?
Available only in Romanian
After we determined the level of risk (likely to be accepted), we are going to establish the time of the investment and this is because, in general, long-term investments in stock investing funds can lead to higher earnings, which easily absorb redemption fees, that are anyway extremely small or zero on large period of time. But if the investment will be on a short period of time the gain will not be too big and the practiced grid of redemption fees becomes very important.
Current funds results associated with the past ones can give an insight into the management of the administrator, but these results can never be considerated a guarantee of future results.
