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Zimmerman's Research Guide


Mutual Funds

A mutual fund is a type of investment vehicle. They are usually marketed as an easy way for people to invest in a type of assets or according to a particular investment philosophy that would be difficult for individuals to manage on their own. Investors can generally buy and sell shares in the fund at any time, which makes them attractive to investors. The fund gets various fees for its services, often a percentage of the money invested, which makes them attractive to mutual fund companies.

Calculator: Kiplinger posts Mutual Fund Tools and Calculators that figure things like, "How much do fees affect my return?." CNN/Money posts a calculator that figures the Taxable Equivalent Yield for a tax-free fund, or vice versa.

Directors: Information about the directors on a mutual fund's board are published in the fund's "Statement of Additional Information" (SAI). This includes the directors' names and compensation, the other boards they sit on, and their personal holdings in the fund. Pimco Funds, Janus and a few other companies make SAIs available on their Web sites; otherwise, you have to call the company and ask for a copy.

Foreign Funds: Equivalents to mutual funds are known as: "unit trusts" or OEICs in the United Kingdom, Australia and Hong Kong; SICAVs and Fonds Commun de Placement (FCPs) in France and Luxembourg; KAGs or AVSVs in Germany; UCITs in other parts of Europe; and "investment trusts" in Japan.

Laws & Regulation: Mutual funds are subject to most of the major securities laws (the Securities Act, the Exchange Act, etc.). The CCH Mutual Funds Guide is a 2-volume looseleaf service compiling the relevant Federal and state laws in one source. See also the separate entry for "Securities Laws" in this Guide. Mutual Funds: Law and Practice (Law Journal Press) discusses the relevant securities and tax laws as well as the business side of operating mutual funds.

Performance: Mutual funds report their performance in their annual reports. You can get a chart of a fund's historical performance from Yahoo! Finance. The annual CDA/Wiesenberger Investment Companies Yearbook gives an overview of how each mutual fund did during a given year. The Wall Street Journal publishes a Quarterly Mutual Fund Guide, based on Lipper data, that runs near the beginning for January, April, July and October.

Quotes and Performance: For current mutual quotes, look in the newspaper, or use quote search on Yahoo! Finance or MarketWatch or another free Internet quote provider. For historical quotes, use the services listed in the separate entry for "Stock Prices."

Ratings: Morningstar posts detailed "QuickTake" Reports in the "Research" section of its Internet site, which includes most of what you want to know about a mutual fund. For even more detailed information, look up the fund in Morningstar Mutual Fund Ratings.

The other major source for fund ratings is Lipper. Lipper data is used in the Forbes bi-annual rankings (in the February and August issues), the Wall Street Journal Quarterly Mutual Fund Guide (discussed below), and several other places.

Statement of Additional Information: See "Directors," above.

See Also
Stock Prices
Bond Prices
CUSIP Numbers
Securities and Exchange Commission
Securities Laws
Unit Trusts

For comments, questions and suggestions, email the author
Copyright 2015 Andrew Zimmerman