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Funds 506: Calculating Your Fund's Personal Rate of Return

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1.
Your personal returns in a fund would not match the fund's reported returns if you were investing your money on a different schedule from the one the fund assumed.
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True. Reported returns assume lump-sum investments at certain times, such as the first of the year. But if you are investing money throughout the year, your return will differ from the reported return.
2.
Why might your personal returns in a fund not match the fund's reported returns?
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You didn't invest in the fund at the start of the period that the reported returns cover. Reported returns are based on lump-sum investments over specific time periods. If you use dollar-cost averaging or if you invest in a fund at any other time than at the start of the period, your personal returns will differ from the reported ones.
3.
If your personal rate of return for a fund is much lower than the return reported by your fund company, you should probably take a look at _______.
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When you've been buying and selling. Your timing probably accounts for the difference.
4.
Where can you always find your personal rate of return for a fund?
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Neither. Fund companies rarely include personal rates of return on documents. You'll have to calculate the number for yourself by using a financial calculator or spreadsheet program, or by entering your portfolio in an online portfolio manager.
5.
In order to calculate a fund's personal returns for a single year, you need all but which of the following?
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None of the above; you need all of them. All of these are necessary when calculating a fund's personal returns for a single year.