Comparing Mutual Fund Returns

There are a lot of resources, particularly blogs, that compare returns from different types of Mutual Funds, and even UITF’s (Unit Investment Trust Funds), over different time periods. For example, try reading ‘The Best Performing Mutual Funds In The Last 3-5 Years‘.

Reviewing these numbers before investing to a new fund is a good exercise for it will give you better perspective at which fund you want to bet your money on. These return numbers are a “look back” at how the funds were managed, and thus performed, in the last 3 or 5 years.

But, as a caveat, these are not fairly comparative numbers after all. Why? Because they don’t incorporate sales load, minimum holding periods, and early redemption fees, if any. For example, you have to instantly deduct 2% from the return posted by First Metro Save and Learn funds if you try to compare it to BPI’s Philippine Stock Index Fund, the latter having no sales load.

So, in choosing the right fund to invest in, a lot of factors have to be considered. In comparing various funds, historical numbers may not necessarily be reflective of future returns, and if you discount other factors like sales load, etc., the actual returns on your money may be totally different.

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