A holistic approach to mutual fund performance rating: A case study in the Turkish market

The mutual fund market in Turkey, exceeding 1 trillion Turkish Liras and involving over 3.7 million investors, presents a complex landscape for non-specialists. Existing ranking methodologies lack holistic perspectives and standardization, making informed investment difficult. This study proposes a comprehensive approach to rating mutual fund performance in the Turkish market. By combining financial ratio analysis, entropy method, and the Simple Additive Weighting methodology, we developed a rating system that considers 70 performance criteria. Using a Python program, we automated performance ratio calculations, improving fund rating accessibility for investors. We tested our approach on historical data, comparing our top-rated fund returns with benchmarks like Gold, USD, EUR, and BIST30. The results suggest our system provides more stable growth, mitigates violent market fluctuation risks, and improves investment guidance in the Turkish mutual fund market. This work can contribute to Turkey's financial sector stability and robustness by fostering informed investment and market growth. Further research may refine this model and apply it to other markets.