A Mutual Fund Calculator to Track Returns

By Stock Research Pro • July 20th, 2009

A mutual fund is a professionally managed investment vehicle in which money is pooled from a large number of people for investments in securities that may include stocks, bonds, money market, or other types of securities. The manager of the fund oversees the trading activity within the fund to achieve the fund’s stated goals while providing the highest possible return. Investors may track the year-to-date performance of their funds by comparing the beginning balance to the current balance, factoring in any deposits or withdrawals they may have made during the year.

The Benefits of Mutual Fund Investing

Mutual funds are often seen as a great first step in stock or bond investing. Mutual fund investing offers a share in a professionally managed portfolio of securities which may include stocks, bonds, or a combination. Through mutual funds, investors can choose a fund that matches their investment objectives and achieve instant diversification to minimize downside risk.

The Elements of Mutual Fund Returns

Mutual fund investors can generate returns in several ways:

Dividend Payments: A mutual fund may generate income to the investor through dividends and interest from its underlying securities. The investor receives the payout, less expenses paid to the fund.

Capital Gains: As the prices of the underlying securities within the fund increase, the fund may sell these securities for a capital gain. These gains are usually distributed to investors (less any capital losses) at the end of the year.

Increased NAV: The net asset value (NAV) of a mutual fund is a measure of the per share value. The NAV of the fund may increase (after deducting expenses) due to a higher value of the fund’s portfolio.

Consider the Risks Associated with the Fund

Before investing in any mutual fund, investors should read the fund’s prospectus to understand the risk the fund takes in achieving its returns. Funds that achieve high rates of return may take on levels of risk that exceed the comfort level of many investors. It is important for investors to consider their risk tolerance as they choose funds that are well-suited for their needs.


The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax advisor.

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