Key performance indicators
Here are some of the typical values used to determine fund performance:
Net Asset Value (NAV)
The NAV is the fund’s value or price per share. The NAV is calculated by dividing the total value of all the fund’s assets (minus its liabilities) by the number of shares issued. NAVs are only calculated once per day, after the market has closed.
Daily NAV Change
Since mutual funds are only priced once a day, the daily NAV change is the difference between the fund’s most recent price per share and its price from the prior day. The daily NAV change can be shown as a dollars-and-cents change or a percentage change.
Mutual fund performance is usually presented as a total return. Total returns include both the fund’s change in value and the reinvestment of any dividends, capital gains, or interest payments.
Average Annualized or Trailing Returns
Average annualized returns, also known as trailing returns, illustrate fund performance over a specific time period, usually looking backward from a recent month or quarter-end. The most common time periods include three months, year-to-date, 1 year, 3 year, 5 year, 10 year and since inception.
Calendar Year Returns
Mutual funds will also often show calendar year returns which illustrate how a fund performed from January 1 to December 31 of that particular year. This allows you to see how the fund performed during specific historical time periods.
Growth of a $10,000 Investment
Below is an example of a chart many mutual funds present to demonstrate how a $10,000 investment in that fund would’ve changed over time. These charts typically go back either ten years or back to the initial launch of the fund.