Explain the various Qualitative factors that need to be taken into account in addition to Quantitative Factors to evaluate the performance of any…

Some of the Qualitative factors that need to be taken into account in addition to Quantitative Factors are as follows: - (1) Quality of Portfolio: - Quality of stocks and securities in the portfolio of the Mutual Funds is an important qualitative parameter. The reason is that the quality of the portfolio plays a big role in achieving superior returns. The qualitative characteristic of portfolio of Equity Mutual Fund involves allocation of funds in top Blue-chip companies, large companies and how diversified is the portfolio. The style followed can be growth, value or blend of the same. In Debt Funds, the quality of portfolio is measured on the basis of credit quality, average maturity and modified duration of the fixed asset securities. Not only that it is necessary that Mutual Fund should hold good quality stocks or securities, but it is also necessary the investment should be as per the objective of the Fund. Under normal circumstances, the fund having lower Portfolio Turnover ratio is considered to be better. (2) Track record and competence of Fund Manager: - Since Fund Manager decides about the selection of securities and takes investment decisions, his/her competence and conviction plays a very big role. The competence of a Fund Manager is assessed from his/her knowledge and ability to manage in addition to past performance. (3) Credibility of Fund House Team: - Team of Fund House also plays a big role towards the investors' interest. In addition to investment decisions, there are some other administrative tasks also such as redemption of units, crediting of dividend, providing adequate information etc. which play a crucial role in qualitative assessment of any mutual fund house.