Reading mutual fund quotes and benchmarks | American Funds

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Reading mutual fund quotes and benchmarks

Information moves at a fevered pitch. Wherever you go, you’re connected. The Internet, cable TV and cell phones can all tell you what fund is down and how well it’s doing for the year. You’re besieged with information 24 hours a day.

And you’ve probably seen the mutual fund section of the newspaper. It may be filled with important information on how your funds are doing. Here’s help on how to read it.

What does a quote tell you?

Simply look for the section in your local newspaper’s business or financial pages to track the progress of your mutual funds. Although your newspaper’s table may vary slightly, it will look something like this.

(Prices for Class R shares and unit classes aren’t available in newspapers. Please refer to your total account value online or in your statement.)

Click on the boxes to see an explanation about that specific item.



What doesn’t a quote tell you?

A mutual fund quote on its own doesn’t give you enough information about the value of your account. Since all of your retirement fund’s earnings get reinvested in a retirement plan, they go toward buying additional shares of the fund. So, you may own more shares today than when you first invested in the fund. The number of shares you own is another important piece of information you need in order to value your account. Check your statement to see the full picture. If you know the current number of shares you own, multiply it by the NAV quote in the paper to calculate the full value of your holdings.

Measure your results

How do your funds stack up against the rest? One of the best ways to know is to compare the fund’s results with those of its benchmarks. The idea behind benchmarks is to see how your mutual fund compares with an index, one that most closely resembles the holdings of your fund. You can also get benchmark information from your paper’s business section by looking under “Lipper Indexes.” Lipper is a company that supplies mutual fund information and analysis. You’ll need to know what categories your funds fall into. Check your fund’s annual and semi-annual reports to shareholders if you’re not sure.

Click on the boxes to see an explanation about that specific item.



Index to the indexes

Another way to measure your fund results is to see how a fund’s returns compare with one of the major market indexes. Some of these indexes are listed below.

Dow Jones Industrial Average

The oldest and most frequently cited index, it tracks the movement of 30 blue chip stocks, primarily industrials. When you think of the Dow, think of big companies: IBM, Coca-Cola and General Motors, to name a few.

Standard & Poor’s 500 Composite Index

It tracks 500 blue chip stocks, primarily of U.S.-based companies. It’s widely considered the benchmark for tracking the results of the stock market.

Wilshire 5000 Index

The largest index. It tracks 5,000 stocks.

Russell 2000 Index

It tracks 2,000 small-company stocks.

Nasdaq Composite Index (Nasdaq)

The index measures all stocks listed on the Nasdaq Stock Market, a broad-based listing of companies representing industries including technology, retail, communications, financial services and biotechnology.

Morgan Stanley Capital International Europe, Australasia, Far East (EAFE) Index

The most commonly watched index for international stock results.

Bloomberg Barclays Aggregate Bond Index

It tracks bonds from different sectors of bond indexes. (Formerly Lehman Brothers Aggregate Bond Index.)

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Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional or downloaded and should be read carefully before investing. This information may vary regarding group annuity investments and, if applicable, can be obtained from a financial professional.