Help Interprating Data

The_Fiddler_2

egamar wrote: »

I don't disagree with what you're saying although I only skimmed it as I think you're missing the OP's point (as I did for so long) about two different numbers not reconciling. I don't think he cares right now about where the numbers came from, or how up to date or accurate they are. Hopefully he'll be along somewhen to say that I have correctly understood his question this time!

He has 5 years discrete data being calendar years 02, 03, 04, 05 and 06 (which he correctly calculates to be 112%) and he has a cumulative 5yr performance figure declared to be 153%.

He's asking why the two are not the same and I'm saying that the reason the two numbers are not the same is that they are actually not looking at the same period. The cumulative 5yr figure is cumulative to a date other than 31.12.06 - I used August as a suggestion, it could be September, it could be yesterday: but it isn't 31.12.06 and that's why he's unable to reconcile the two sets of numbers - they are not looking at the same period.

It's just a simple case of the OP expecting the 5 discrete years to be years to (say) August 31st every year, and the 5yr cumulative performance also being calculated to that date. I'm sure I've seen figures quoted that way, as you say; but the particular ones he was looking at were calendar years ending 31.12, so they would never reconcile with the 5yr cumulative to (say) August.

Yup, you got it this time SHE says

Fair enough (I think ) if the data represents different time periods, it could explain the differences, but if it is the same time periods

egamar

The_Fiddler wrote: »

Yup, you got it this time SHE says

Fair enough (I think ) if the data represents different time periods, it could explain the differences, but if it is the same time periods

Ooops - pardon!

I'm pretty sure I'm right! If the data IS for the same time periods please contact my psychiatrist for details of visiting hours.

dunstonh

With a number of free providers, the discrete data and cumulative data does use different time periods. Most common difference is one is updated monthly and the other is to end of quarter.

The_Fiddler_2

So really we would want to be looking at the annual figures for trends though rather than the cumulative figures for trends ( yes I know past performance doesn't necessarily predict future performance , but cumulative figures can mask trends (good or bad))

The_Fiddler_2

Next question

What are quartiles, how are they calculated, what do they show, how can you guage performance?

I've seen it written (I think) you should look at 2nd quartiles, why?

dunstonh

What are quartiles, how are they calculated, what do they show, how can you guage performance?

You split the performance table into 4 quarters. 2nd quartile consistency is often better for lower risk investors. Some funds aim for top quartile by taking on a risk which if pays off will see them do well but if it doesnt could see them drop to 4th quartile. Others play it safer and go for consistency.

The_Fiddler_2

Sorry, I don't quite understand, what performance table?

egamar

dunstonh wrote: »

You split the performance table into 4 quarters. 2nd quartile consistency is often better for lower risk investors. Some funds aim for top quartile by taking on a risk which if pays off will see them do wellbut if it doesnt could see them drop to 4th quartile. Others play it safer and go for consistency.

Completely true, but maybe assumes a bit of knowledge the poster doesn't have yet and takes her a level or two further than where she thought she might be going. me too actually, now I have correlated target quartile with risk, thanks to your comments.

Quartile just means quarter. 1st quartile - in the top 25% by performance; 4th quartile - in the bottom 25% by performance. Same with decile, where the figure is 10%.

If a fund has been in the first quartile for the last 'n' periods, it means it has been in the top 25% of all funds IN ITS SECTOR for those periods.

Interestingly for me dunstonh makes the point that a fund may decide not to aim to be in the top quartile if its manager(s) decide they would rather aim lower with less risk. I had always thought 4th quartile = rubbish and to be avoided, now I know it might be low risk rubbish to be avoided. (That was an attempt at a joke, I hope it did not confuse).

egamar

The_Fiddler wrote: »

Sorry, I don't quite understand, what performance table?

Jargon/colloquialism: List of funds in the relevant sector shown in descending* order of performance over the selected time period.

Now, I think you might have been able to work that out by reading between the lines ..... you're going to have to start developing that skill otherwise you're going to have more questions than we can answer!

I'm expecting you to ask about sector and benchmark soon .....:) unless you're all squared away with that. If you do ask, maybe you could tell us what you have deduced the thing you're asking about might be, and how you made the deduction, and we can comment on that?

There are sites that show you performance tables, Trustnet being a particularly good one, but the discrete fund fact sheets would just report the fund's location in the quartiles according to its sector without showing you all the other funds.

I hope a) that's clear enough and b) accurate enough - it's been a long day.

* Could be ascending, but then the meaning of first and fourth quartile would be reversed, unless the context dictated othewise.

egamar

The_Fiddler wrote: »

So really we would want to be looking at the annual figures for trends though rather than the cumulative figures for trends ( yes I know past performance doesn't necessarily predict future performance , but cumulative figures can mask trends (good or bad))

Try charts - they give a good picture of what the fund has done, and most sites offer the ability to compare against an index of one kind or another.

This is a good charting site, http://www.moneyextra.com/funds/UK/chart/ADLBH but it's easiest to use, I think, when you've constructed a portfolio of your actual holdings or holdings you're interested in. Play with this chart and add in some indexes, some funds in the same sector and so on and see how it gives you a picture over various time periods of what the fund has done a) absolutely and b) relative to other things.

BTW: I LOVE this fund: it's given my 445% since 31 Mar 03!