Scientific mutual fund and ETF screening criteria: a summary Scientifically based selection criteria are rational methods to screen mutual funds and ETFs.
Recently, The Skilled Investor Blog published a series of articles on scientifically based selection criteria for mutual funds and exchange traded funds (ETFs). These screening rules help you to winnow down the thousands of available investment funds to a more manageable group for your more careful evaluation prior to investing. This article summarizes these selection criteria.
In future articles, The Skilled Investor Blog will discuss how to put these fund selection criteria into action. We will clarify certain minimum requirements for on-line fund data and screening tools. We will discuss where you can find useful and hopefully free screening databases and tools on the web. We will also provide a detailed example of how to use these selected on-line screening tools with the scientific fund selection criteria summarized in this article.
People simply want to invest in mutual funds and exchange traded funds (ETFs) that have higher chances of doing better in the future on both a sustained and risk-adjusted performance basis. With real lives to lead, people who are not professional investors, just want an efficient, but effective fund identification process. They want to pick the funds that will make their investment assets work for them rather than having to work for their assets by spending large amounts of time monitoring and repeatedly changing funds.
Millions of individual investors run futile hamster wheel races pursuing the illusion that the superior past performance of funds and individual securities will lead to superior future performance. The Skilled Investor Blog has written these articles for those who know that they need to stop chasing their tails and get on with their real lives. However, it is difficult for anyone to stop running in a personal hamster wheel and get off, unless he or she is convinced of a better alternative that can be self-implemented with relative ease.
The good news is that the scientific finance literature has shown that there really are better approaches to buying and owning funds. You do not need to frantically chase fund performance. Better performance tends to come to those who calm down and more carefully evaluate what tends to work before buying into investment funds. The following summarizes fund selection articles published in The Skilled Investor Blog recently. These selection criteria can help break [...]