Investing Advice

Mutual Fund Annual Report

Many mutual fund investors fail to read or understand the annual report that funds publish and mail to them each year. Here are some of the basic things to examine:
  • Performance. Since the fund is required to compare its return on your investment with an appropriate benchmark, you will see if your fund did better or worse than its peers.
  • New Management. If the fundís manager has changed, this may be good or bad. If the track record of the old manager was part of your reason for choosing the fund, you might want to check out the new managerís experience and record.
    • Proxy Statement. This will be included if the fund is making a big change such as changing its investment policies, doing a merger, or changing its name.

    • Portfolio. You will want to verify the types of securities that the fund is currently holding are what you believe its investing style should be. Funds are prone to change over time. Note that the list of stocks in this report may be six months out of date.

    • Auditorís Report. You want it to be short and positive, just a few paragraphs at most. If it is much longer, there may be real problems.

    • Asset Growth. If your fund has been a top performer, it may be attracting a lot of new money. Small stock funds that grow too bug too fast, canít sustain top earnings for their investors.

    Other Stock Market Basics Topics:
    1. Mutual Fund Advantages
    2. History of Mutual Funds
    3. NAV
    4. Dollar Cost Averaging
    5. General advice about choosing a fund
    6. Mutual Fund Ratings
    7. Evaluating Mutual Fund Investment Risk
    8. Mutual Fund Share Classes
    9. Mutual Fund Fees
    10. The Mutual Fund Prospectus
    11. How important is the manager's length of experience?
    12. Why is the prospectus hard to understand?
    13. Mutual Fund Annual Report
    14. Comparing your fund to the competition
    15. Comparing funds on an after-tax basis
    16. Average Return on Investment
    17. How Not to Pick a Mutual Fund
    18. Cashing in Your Fund
    19. When to Sell Your Fund
    20. Mutual Funds and Asset Allocation
    21. When to get started with a mutual fund
    22. Types of Mutual Funds
    23. Value Stock Funds
    24. Growth Stock Funds
    25. Small and Micro-cap Stocks
    26. Mid Cap
    27. Large Cap Companies
    28. Income Stock Funds
    29. Mutual Fund Index
    30. Enhanced Index Funds
    31. Sector Mutual Funds
    32. Stock Market Sectors
    33. Defensive Stocks
    34. International Funds
    35. Real Estate Mutual Funds
    36. Socially Responsible Funds
    37. Balanced Funds
    38. Tax-Efficient Funds
    39. Bond Convertible Funds
    40. Junk Bond Funds
    41. Mixtures of stock types
    42. Closed End Funds
    43. Exchange Traded Funds (ETFís)
    44. Stock Picking Strategy - Picking your own stocks?
    45. Fund names, and what they really invest in
    46. How to get started
    47. Where can I start investing with no money?

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