The study tries to provide an insight into the Turkish equity market and to point out the recent developments. It answers the question: “Which Turkish equity funds is the best one for different types of investors?” Using a scoring system, the study makes the equity funds comparable and calculates the best one for each character. After touching latest structural developments, the different key figures and the scoring model of the comparison of the equity funds are explained. Giving points to the best equity funds in his ratio, a first answer to the question “which is the best one?” will be found. At the end of the study the reader is able to see that due to the fact that every investor emphasizes other facts diverse solutions arise. There are types of investors who focus on performance ratios and others, who emphasize risk aspects. Nevertheless a selection of classification numbers for each of them helps to find the right equity funds for everyone.
Table of Contents
1. INTRODUCTION
2. MARKET OVERVIEW
2.1 HISTORICAL BACKGROUND
2.2 POLITICS
2.3 ECONOMY
3. THE COMPARISON
3.1 EQUITY FUNDS
3.2 THE KEY FIGURES
3.2.1 The Load
3.2.2 Cost Average Effect
3.2.3 Fund Size
3.2.4 Performance
3.2.5 Relative Strength
3.2.6 Volatility
3.2.7 Morningstar Rating for Stocks
3.3 THE SCORING MODEL
3.3.1 Point allocation I
3.3.2 Types of investors
4. FINAL STATEMENT
Research Objectives and Key Topics
This study aims to provide an overview of the investment potential within the Turkish equity market and utilizes a specialized scoring model to evaluate and compare representative equity funds to assist different investor profiles in their decision-making process.
- Analysis of the historical, political, and economic development of the Turkish market.
- Examination of key financial metrics for fund evaluation, including volatility and performance.
- Development of a comparative scoring model for various equity funds.
- Categorization of investor types and their specific investment preferences.
Excerpt from the Book
3.2.6 Volatility
The volatility or standard deviation depicts how widely a mutual fund's returns varied over a certain period of time. Investors use the standard deviation of historical performance to try to predict the range of returns that are most likely for a given fund. When a fund has a high standard deviation, the predicted range of performance is wide, implying greater volatility.
If a fund's returns follow a normal distribution, then approximately 68% of the time they will fall within one standard deviation of the mean return for the fund, and 95% of the time within two standard deviations. For example, for a fund with a mean annual return of 10% and a standard deviation of 2%, you would expect the return to be between 8% and 12% about 68%of the time, and between 6% and 14% about 95% of the time (Morningstar.com Glossary, 2005).
Chapter Summary
1. INTRODUCTION: Outlines the recent performance success of Turkish equity funds driven by economic reforms and provides the scope of the study.
2. MARKET OVERVIEW: Examines the historical, political, and economic factors, such as inflation decline and EU accession negotiations, that have improved Turkey's attractiveness for investors.
3. THE COMPARISON: Details the key financial figures used to evaluate funds and presents the scoring model designed to classify the best investment options based on individual investor needs.
4. FINAL STATEMENT: Concludes that while the Turkish equity market is highly attractive, fund selection remains a subjective process that requires individual risk assessment.
Keywords
Turkey, Equity Funds, Scoring Model, Performance, Volatility, Market Analysis, Investment, Cost Average Effect, Morningstar Rating, Investor Types, Economic Reform, Portfolio Management, Relative Strength, Risk-Reward Ratio
Frequently Asked Questions
What is the primary focus of this research paper?
The paper focuses on analyzing the Turkish equity market and identifying the best-performing funds for different types of investors using a structured scoring model.
What are the central themes discussed in the study?
The core themes include the macroeconomic development of Turkey, key financial metrics for fund analysis, and the application of comparative models to assess investment suitability.
What is the main objective of the proposed scoring model?
The objective is to make diverse equity funds comparable by assigning points based on specific key figures, allowing investors to find the fund that best matches their personal risk and return preferences.
Which methodology is used to evaluate the funds?
The author uses a quantitative scoring system that aggregates various performance and risk indicators, complemented by a qualitative approach to categorize investor needs.
What does the main body of the work cover?
The main body covers a comprehensive market overview, a detailed explanation of financial figures such as load, performance, and volatility, and a practical application of the scoring model for various investor profiles.
Which keywords best characterize this work?
Key terms include Turkey, Equity Funds, Scoring Model, Performance, Volatility, and Investment Strategy.
How does the "Cost Average Effect" influence investment?
It helps investors reduce their average share price by investing equal amounts at regular intervals, which allows for buying more shares when prices are low and fewer when prices are high.
How are investor types differentiated in the model?
The model distinguishes between four types of investors—careful, long-term, short-term, and relative performers—each prioritizing different metrics like volatility, duration, or outperformance.
- Quote paper
- Ismail Cetin (Author), 2006, The Turkey-Story - Using a scoring model for the comparison of equity funds, Munich, GRIN Verlag, https://www.grin.com/document/60899
