Selecting A Fund

As you can see there are lots of options.   Here are a few things to look at when selecting a mutual fund. Keep in mind most funds in their prospectus, will not tell you which securities they actually own.  To find out, you have to ask for their latest quarterly or annual report.  Remember it may have changed from the time it was printed to the time you receive it.
  • Investment Objective:   Long range, short range, aggressive, conservative, corporate bonds, mutual funds are just some of the descriptions of funds to be found in the prospectus.
  • Investment Style:   Do they invest in large companies or small; domestic or international, or both; single sector or multiple sectors; bonds or stocks.  This information can be found in the prospectus.
  • Performance Record:   You need to know how the fund performance compare to: 1.  The Market as a wholes, and; 2.  its performance against comparable funds.  Look at the total return (price changes plus reinvested earnings) over many years. 
  • Fees & Expenses:   Before you buy make sure you are aware of all the fees involved in the mutual funds such as sales and management fees, marketing and administration fees (see above).
  • Services:   How easy is it to go in and out of a fund, or switch from one fund to another within the same company?   Are they helpful when you call?   Are their records easy to read?