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Bridge over ocean
1 May 2002 Financial Analysts Journal Volume 58, Issue 3

A Sensible Mutual Fund Selection Model

  1. Hakan Saraoglu
  2. Miranda Lam Detzler

We present a rigorous framework for asset allocation and selecting mutual funds that takes into account the unique preferences and constraints of an individual investor. The framework is based on the analytic hierarchy process (AHP), and the model generates reasonable asset-allocation recommendations and identifies the most suitable funds within an asset class. We include sample mutual fund selection for a hypothetical investor. A mutual fund selection model that uses the AHP framework is flexible, is user friendly, and ensures consistency throughout the portfolio decision process.

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