Question

Impressive Fund has excellent investment performance last year, with portfolio returns that placed in the top 10% of all funds with same investment policy. Do you expect it to be a top performer next year? Why or why not?

Answer 1

Answer:

Performance next  year

If impressive funds performed excellent in the last year, it does not mean that the same fund would be the top performer in the coming year. Performance depends upon the market and the financial position of the company in which one has invested funds.

Moreover, it also depends upon market conditions. Performance of funds generally increases when the economy is booming, and decreases when the economy is facing recession. So, before investing in any fund an investor should make a deep understanding of the prospects and opportunities to the company in terms of its financial position and growth.