Wednesday, October 15, 2008

Mutual Fund Interim Report

This is one of the oldest fund I have kept - Public Index Fund from Public Mutual.

This particular one is Interim Report - published 6 months after last annual report.

This parts below shows how much return this fund gives for the past years.  A few highlights are
  • Financial Year Ended 31 Jan
  • Lipper method  
Normally I ignore this part because unless you purchase the fund on 31 Jan, else those return doesn't really mean much to you.  Another use of these numbers are to compare with another fund that also has financial year ended on 31 Jan and also used Lipper method to calculate the return, else these numbers really don't mean much to normal investors.

This part is one of the most popular questions in this blog.

When you have invested into a mutual fund, their interim or annual report would include something like this.  It lists down some of the businesses it invest into.

Here I should also explain that in real life, fund manager has to change the ratio and buy sell stocks quite actively.

That also means they may or may not be able to list down all the stocks they transact.

In below graph, the black line is the fund, the red line is the index the fund compares to.  This is also something that is ambigous and normal investor shouldn't hold too strong on to.

Basically this says, since 2003 this fund has gain 70% to date, 10% more than the index gain.

Again, the pick of 2003 is the key.  If you bought this fund in 2003 then this graph is very relevant.  Else no.  For example, if you draw the same graph using mid 2007 as the starting reference point, then you would get 

So basically if the reference time is relevant to you, then you want to make sure the fund outperform the index in up trend and drop less during down trend ( earlier post talked about that )

This is the part saying who manage this fund.  Unfortunately, for big company it would usually just say the fund manager is a company.  So its quite hard to determine exactly who is the person you should follow.