Performance Metrics

In this section, we outline the key metrics Meme Fund uses to evaluate the performance of the fund. These metrics ensure transparency, provide insights into the fund’s growth and stability, and demonstrate how we compare against industry benchmarks. By focusing on these metrics, we give our investors a clear understanding of the fund’s results and risk management practices.

Key Metrics We Evaluate

1. Cumulative Return

• What It Measures: Cumulative return reflects the total percentage growth of the fund from its inception to the present, including the compounding effect of monthly returns.

• Why It Matters: It provides a clear picture of how the fund has grown over time and is an essential metric for long-term performance evaluation.

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1. Benchmark Comparison

• What It Measures: The fund’s performance is compared against a relevant market benchmark, such as a memecoin index or similar peer groups. The benchmark cumulative return helps evaluate the fund’s relative success.

• Why It Matters: It shows whether the fund is outperforming or underperforming the broader market, which is critical for assessing our strategy’s effectiveness.

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1. Drawdown

• What It Measures: Drawdown captures the maximum percentage drop from the fund’s highest value (peak) to its lowest value (trough) over a specific period.

• Why It Matters: This metric highlights the risk associated with the fund by illustrating how much value could be temporarily lost during market downturns.

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1. Volatility

• What It Measures: Volatility indicates the degree of fluctuation in the fund’s returns over time, showing how stable or variable the returns are.

• Why It Matters: It helps investors understand the consistency of returns and the risk-reward balance.

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1. Risk-Adjusted Metrics

• Sharpe Ratio: Measures the fund’s excess return per unit of risk. A higher Sharpe ratio indicates better risk-adjusted performance.

• Alpha: Evaluates the fund’s ability to outperform the benchmark, adjusted for market risk. Positive alpha indicates the fund generates returns above market expectations.

• Beta: Indicates the fund’s sensitivity to market movements. A lower beta suggests the fund is less correlated with market volatility, offering better diversification.

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How These Metrics Work Together

• Holistic Evaluation: By combining cumulative returns, benchmark comparisons, and drawdowns, we provide a comprehensive view of performance.

• Risk Management: Metrics like volatility, drawdown, and risk-adjusted returns demonstrate how we manage risk while striving for high returns.

• Transparency: Clearly defined performance metrics ensure that investors can track and evaluate the fund’s success with confidence.