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1.
A good shareholder report will compare your fund's performance with what?
Both. You want to know how your fund stacks up against an index as well as a set of peers.
2.
In your mutual fund shareholder report, turn to your fund's per-share data if you want to find _______.
The turnover ratio. Stocks are listed in the portfolio-holdings section while an expense breakdown appears in the statement of operations. The per-share data features a series of ratios such as annual expenses and turnover as well as per-share distribution and net asset values.
3.
Where in the mutual fund documents are you most likely to find an explanation of why your fund performed the way it did during the past year?
In the portfolio manager's letter. Your manager runs the fund day to day, so you are most likely to find useful context in his or her letter. The president's letter tends to focus on economic and market trends. The footnotes provide details about the portfolio.
4.
The part of a mutual fund shareholder report that discusses recent performance should, ideally, cover performance over what time frame?
Several different time frames. The report should include several different time frames, both short and long.
5.
Where in the shareholder report are you most likely to find information about whether a fund shorts stock or practices other complex strategies?
In its footnotes. While some information about strategies such as shorting stocks may appear in the portfolio holdings section, your best bet is to scrutinize the footnotes for this information. Don't count on managers touching on these strategies in their letters.
