Mutual Fund Technical Analysis

3478 Words 14 Pages
Register to read the introduction… Each mutual fund is described by three different values. The net value, which is the value of each share of the fund and derives from the division of the assets of the mutual fund with the number of shares which currently circulate. The disposition value, is the value that someone pays in order to buy shares of a fund. In other words, the price at which the company that is administrating the mutual fund sells its shares. This value, in most cases, is higher than the net value of the share. The difference between the net value and the disposition value, is the selling commission that receive the firms who are in administration of the mutual funds.
The purchase value shows how much money will someone receive if he decides to liquid one or more shares of a mutual fund. It is the price that the administrating firm pays for buying a share of the fund. The purchase value is usually lower than the net value and in no case higher. The difference between the two values- net and purchasecorresponds to the commission that receive the administrating firms during the liquidation of shares.
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For this reason, if we want to implement the two moving averages technique, with a real exchange cost, in a series of mutual funds such as the “Alfa External Stock Fund”, we will have to use at the same time another rule. Which will function as a filter for the rejection of those exchanges where the cost is bigger than the profit. Possibly it will be needed to be implemented the channel technique of the technical analysis, or even the use of a third or fourth moving average. At this point we applied the three moving averages technique, for few though simulations, for values close to the best value of the two moving averages technique. Again without calculating the exchange cost. The simulations which took place were for the parameters Ks=1 (short-term), 15£ Kl1£ 21 (first long-term) and 22£ Kl2£ 28 (second long-term). For the values Ks=1, Kl1=18, Kl2=27 (where the best value for the two moving averages was observed) the final amount increases to 190,263 units.
Finally, from those 49 simulations, the best value is given for the parameters Ks=1, Kl1=21, Kl2=23 and the final amount is 200,824. We observe that the use of a third moving average improves the results and maybe this can be

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