Fund I-Q No.7: Comparative Total Returns
A mutual fund's total return investment quality is evidenced by relatively consistent positive performance as compared to its peers, its category benchmark and an appropriate broad market index, over five- and 10-year periods, preferably the latter.
Historical comparative data is useful to investors as a reasonable basis, albeit not a guarantee, for forming expectations about future investment results. Using historical patterns is better than depending on guesswork about what's going to happen in the future.
Mutual fund investors would be wrong to completely disregard past fund performance as a predictor of future performance. At the same time, do not base a fund selection entirely on past results or be seduced by eye-popping, extraordinary gains, which may be temporary. There are a number of fund investment qualities to be considered in evaluating a mutual fund investment.
To help readers get a quantitative fix on mutual fund annualized total return numbers, below are the fund category averages as per Morningstar's FundInvestor year-end 2005 fund statistics for its universe of 500 of the most widely traded mutual funds:
|Fund Type||5-Year %||10-Year %|
|Large Cap Growth||-3.4||7.0|
|Large Cap Blend||0.5||8.1|
|Large Cap Value||4.0||8.9|
|Mid Cap Growth||0.0||8.5|
|Mid Cap Blend||8.1||11.7|
|Mid Cap Value||9.4||11.4|
|Small Cap Growth||2.2||8.2|
|Small Cap Blend||9.9||11.2|
|Small Cap Value||135||2.8|
Return to the Main Menu.
Scoring Fund Performance Data
A company with a market capitalization between $2 and $10 billion.
A mutual fund that invests its assets in a relatively large number ...
A type of mutual or hedge fund that is not restricted to investing ...
An investment vehicle that is made up of a pool of funds collected ...
A category of equity mutual funds with portfolios that are made ...
Refers to stocks with a relatively small market capitalization. ...
Learn what a mutual fund and a money market fund are, and understand the differences between each and how they serve various ... Read Answer >>
Learn how and why mutual funds pay interest or dividends, including the different funds and which types generate each type ... Read Answer >>
Mutual funds have been in existence since 1924, when the first open-ended mutual fund was created. Since then, the market ... Read Answer >>
There is no written rule that stipulates how much of a company a mutual fund can own. Instead, there are two major factors ... Read Answer >>
Discover why index mutual funds are generally less expensive than actively managed funds and learn about three of the lowest-cost ... Read Answer >>
As both "blend"and "balanced" describe the particular asset mix of mutual funds, determining the exact distinctions between ... Read Answer >>