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What are the key macroeconomic factors that influence the return on a mutual fund?

What are the key macroeconomic factors that influence the return on a mutual fund?

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Expert Solution

Key macroeconomic factors that influence the return of mutual funds are as follows-

A. INFLATION RATE in overall economy that will affect the overall rate of return of the mutual fund because a mutual fund is exposed to investment into various stocks in the economy and if the inflation rate in economy is going to go up, it will lead to negative effect on rate of return of various systems leading to negative net asset value of mutual fund.

B. When the INTEREST RATE in the economy is changing frequently, it will affect the overall rate of return of the mutual fund

C. POLITICAL STABILITY in a country in which the mutual fund is invested is highly important and it is also affecting the rate of return of the mutual fund

D. MONETARY POLICY of a country is also very important in deciding the rate of return of a mutual fund because it is exposed to various kind of policy changes

E. Mutual fund is also exposed to various kinds of rules and regulations and LEGAL CHANGES in the framework in the economy because it will also affect the rate of return on Mutual Fund

jeff jeffy answered 1 year ago
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