How to Read My Mutual Fund Statement


If you have a 401k or IRA, then you probably own a mutual fund. Mutual funds have become a staple in individual investment portfolios as they provide the investor with automatic diversification and professional asset management. Despite this, most investors probably have difficulty understanding their account statement, and the different terms listed.

Review the line item titled "Customer folio." This is usually at the top of the statement—like an account number on the top of your bank account statement. This is the number you should use for any correspondence with the mutual fund manager.

Understand the statement date and your personal information. The statement date is the date of issuance by the mutual fund. If there are any discrepancies, contact your mutual fund representative immediately.

Review the fund name and dates on which all transactions took place. The typical transaction type is stated using the letters SIP, which denotes a systematic investment; installments or transfers are usually denoted using STP, and withdrawals are marked as SWP.

Look for information regarding dividends. A dividend reinvestment is denoted using the term "Rs." A dividend payout of Rs 0.150 means a dividend will be paid at $.150 per unit.

Understand the term NAV. This is by far the most important piece of information on your statement. NAV means net asset value, or the price per unit of investment. It is the equivalent to an EPS (earnings per share) amount for single stock purchases.

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