How to Gauge Your Total Return On Mutual Funds

Your Net Asset Value (NAV) is the key to how to gauge your total return on mutual funds. Unfortunately, the NAV is difficult to understand, much less maneuver to determine your total return. If you want to figure out your total return yourself, there are several formulas ranging from simple and ineffective to more precise but very complicated. Your best bet is to rely on your fund manager and read your annual report for the numbers you are looking for.

Things You'll Need

• High school math skills
• Your mutual fund's annual report
• Pencil and paper
• A calculator

Instructions

Gauging Your Mutual Fund's Total Return

1. Get a pencil, some paper, a calculator and your most recent statement with your yearly activity.

2. Find your current balance.

3. Find your account balance from the beginning of the year.

4. Subtract the year's beginning balance from your current balance.

5. Divide the number you get by 2.

6. Add your year's beginning balance back to the number you just figured. This is your average monthly balance.

7. Find the number you got when you subtracted your beginning balance from your current balance and subtract any deposits you made. If you made any withdrawals, add these. This is your total gain or loss.

8. Divide your total gain or loss by your average monthly balance.

9. Multiply the number you got in step 8 by 100. This will tell you roughly your total return for the year.

10. If the numbers don't make sense, you can't find your current or beginning balance or you simply don't have the time to figure all this out, contact your fund manager or financial advisor.

Tips & Warnings

• If you find that you can't make head or tail of the numbers you're dealing with, contact your financial advisor or fund manager.

• Software is available to calculate your total return for you. Visit your local bookstore or software retailer for investment software.

• Remember to read your quarterly and annual reports. If they are tailor-made for you, your total return may already be calculated and included in your report.

• The formulas for determining your mutual fund's total return are not precise. At best, they can give you an estimate of how you are doing.

• If you have had a loss, the formula described here may skew your return.