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 standard against which the performance of a security, mutual ...
Securities analysis that uses subjective judgment based on nonquantifiable ...
Alpha is used in finance to represent two things: 1. a measure ...
A financial statement that summarizes the revenues, costs and ...
The degree to which an asset or security can be quickly bought ...
Equity is the value of an asset less the value of all liabilities ...
For investors, arithmetic and geometric means can be important – and potentially controversial – measures of past investment ... Read Full Answer >>
The Vanguard mutual fund family is one of the largest and most well-recognized fund family in the financial industry. Its ... Read Full Answer >>
Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
OptionsHouse has access to some mutual funds, but it depends on the fund in which the investor is looking to buy shares. ... Read Full Answer >>
Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
Mutual funds in India work in much the same way as mutual funds in the United States. Like their American counterparts, Indian ... Read Full Answer >>