Elements of the Equity Mutual Fund Comparison Guide Created by BetterInvesting, formerly the National Association of Investors Corporation

Transcription

1 Elements of the Equity Mutual Fund Comparison Guide Created by BetterInvesting, formerly the National Association of Investors Corporation Portfolio Characteristics Management Performance Fees & Other Costs Risk Metrics Ranking Calculation 6

2 Elements of the Equity Mutual Fund Comparison Guide Portfolio Characteristics Portfolio Composition Distribution of investments across various asset classes. Market Capitalization Distribution across sizes of companies based on market cap. Number of Sectors Number of Stocks in Portfolio 7

3 Elements of the Equity Mutual Fund Comparison Guide Management Performance Management Tenure Average Turnover Rate Total Return over 3, 5 and 10 Years Total Tax-Adjusted Return (if in a taxable account) 3-Year Average Portfolio Earnings Growth Average Price/Earnings (P/E) Ratio 8

4 Elements of the Equity Mutual Fund Comparison Guide Fees & Other Costs Management Fee Expense Ratio Brokerage Commissions (if any) 12b-1 Fee Deferred Load or Redemption Fee 9

5 Elements of the Equity Mutual Fund Comparison Guide Risk Metrics Morningstar Rating (Stars) 3-Year Standard Deviation 3-Year Risk Adjusted Return 10

6 Elements of the Equity Mutual Fund Comparison Guide Ranking Calculations Counts up the number of metrics ranked 1, 2 or 3. Counts the Total number of metrics compared. Calculates the average for the overall Score. 11

7 Risk Cost Management Screening for High Long-Term and Sustainable Performance Mutual Funds Section Metric Rank Management Tenure (Total number of years) Average Turnover Rate % Total Return % 10-Year Avg. 5-Year Avg. 3-Year Avg. Tax-Adjusted Return % 10-Year Avg. 5-Year Avg. 3-Year Avg. 3-Year Average Portfolio Earnings Growth % Average P/E Ratio Management Fee % Expense Ratio % Brokerage Commissions % 12b-1 Charges % Front-End Load % Deferred Load % -or- Redemption Fee % Morningstar Rating 3-Year Standard Deviation % 3-Year Risk Adjusted Return % 12

8 Using the Equity Mutual Fund Comparison Guide Comparison Info Fill in yellow box with Fund Category, Date, Preparer s Initials and whether the account is Taxable or Tax- Deferred. Enter the last month s Risk Free Rate and the S&P 500 Standard Deviation. Enter the Fund Symbols and Names. 13

9 Using the Equity Mutual Fund Comparison Guide Portfolio Characteristics Enter the percentage invested in each asset class. Enter the percentage invested by market cap. Enter the number of Sectors Covered by the fund. Enter the number of Stocks in the Portfolio. 14

10 Using the Equity Mutual Fund Comparison Guide Management Enter the total number of years for the Management Tenure. Enter the Average Turnover Rate. Enter the Total Return for the past 10, 5 and 3 year averages. Enter the 3-Year Average Portfolio Earnings Growth Enter the Portfolio s Average P/E Ratio. 15

11 Using the Equity Mutual Fund Comparison Guide Fees & Other Costs Enter the Management Fee (percent of assets). Enter the fund s Expense Ratio. If purchased through a broker, enter the Brokerage Commission. Enter the 12b-1 Charge. Enter the Deferred Load or Redemption Fee if the fund charges one. 16

12 Using the Equity Mutual Fund Comparison Guide Ranking Enter the Morningstar Rating. A link to the Morningstar web site is available on the Guide. Enter the 3-Year Standard Deviation. The Guide calculates the 3-Year Risk Adjusted Return. 17

13 Using the Equity Mutual Fund Comparison Guide Risk Metrics Rankings are calculated automatically by the Comparison Guide! 18