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What are quintiles?

01 September 2024

In finance, a quintile is a statistical measure dividing a set of observations into five equal parts. Each quintile represents 20% of the dataset. This measure is often used in investment analysis, particularly for ranking and comparing the performance of securities, such as stocks or funds, within a certain category.

For instance, if a mutual fund is in the first quintile of its category based on annual returns, it means it has performed better than 80% of its peers in that category. This quintile ranking system helps investors in identifying top and bottom performers. It provides a straightforward way to compare investments on the basis of various metrics like return, risk or other relevant investment criteria.

While quintile rankings offer a useful comparative tool, they shouldn't be the sole factor in making investment decisions. It's important to consider other aspects such as the consistency of performance, fund management, investment strategy, fees and the overall risk profile. Investors should remember that past performance is not indicative of future results and quintile rankings can change over time.

 

 

This Trustnet Learn article was written with assistance from artificial intelligence (AI). For more information, please visit our AI Statement.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.