Which metric is used to assess the effectiveness of public investment funds?

Return on investment (ROI) is a critical metric used to assess the effectiveness of public investment funds because it measures the gain or loss generated relative to the amount of investment. In the context of public investment funds, ROI provides a clear indication of how well the fund is performing in terms of profitability. This metric allows fund managers and stakeholders to evaluate the success of their investment strategies and to compare performance across different funds or investment opportunities.

ROI takes into account both capital appreciation and income generated from investments, giving a comprehensive view of the financial performance of the fund. A higher ROI signifies that the fund is effectively generating returns for its investors, which is the primary goal of any investment fund.

The other metrics mentioned, such as net asset value, cost-to-income ratio, and expense ratio, serve different purposes. Net asset value measures a fund's total assets minus liabilities, providing insight into the fund's size and value but not its performance. The cost-to-income ratio is focused on operational efficiency rather than investment returns, and the expense ratio reflects the costs associated with managing the fund, which influences net returns but does not directly measure investment effectiveness. Thus, ROI remains the most direct and relevant metric for assessing the effectiveness of public investment funds.