| In the vast investment market of more than | | | | The Performance of mutual funds is based on the |
| 9,000 mutual funds, how can top mutual fund | | | | daily net asset value change. When the change is |
| performers be identified? Mutual funds that give | | | | more or less than the value of the nav, the |
| shareholders large dividends (income/capital gains) | | | | percent of performance is a gain or loss. Total |
| are one category to pursue. Funds that maintain | | | | return of a mutual fund includes the distribution, if |
| performance growth are another. But how are | | | | any, and the performance. |
| these mutual funds found? | | | | Mutual Funds Model |
| A good solution is to screen the mutual fund | | | | Mutual Interest Data Service ( screens and |
| universe and select funds having the best track | | | | analyzes thousands of mutual funds every year |
| record of distributing large income/capital gains. At | | | | that distribute large income/capital gains. A data |
| this point, funds that maintain long-term | | | | base of more than 900 mutual funds is |
| performance growth have to be identified. There | | | | established on the best five year accumulative |
| still would be other considerations such as | | | | total returns. |
| investment classification, fees, expense ratio, initial | | | | On September 15, 2006 $10,000 was |
| purchase, IRA purchase, risk, etc. to add in the | | | | hypothetically invested between 4 mutual funds |
| process. | | | | from the MIDS' data bank. The objective for |
| Mutual Funds Earn Income and Capital Gains | | | | these mutual funds is: 1) achieve performance |
| The dividends and interest earned by a fund on | | | | growth, 2) increase the shares owned, 3) minimize |
| its investment is the fund's income. Many of these | | | | the risk, and 4) maintain a comfortable lifestyle in |
| equity mutual funds distribute income quarterly. A | | | | all market conditions. |
| fund selling an investment security for a higher | | | | · Balanced $2,000.00 (114.92 shares) |
| price than originally paid, has a gain. A fund selling | | | | · Equity Income $2,500.00 (89.22 shares) |
| an investment security for a lower price than | | | | · Multi-Cap Core $2,500.00 (139.60shares) |
| originally paid, has a loss. If the investment | | | | · Specialty Health $3,000.00 (20.19shares) |
| security is held by the mutual fund for more than | | | | $9,843.08 (-1.56%) Actual Investment after initial |
| one year, the gain or loss will be a long-term | | | | Fees |
| capital gain or loss. If the investment security is | | | | As of April 5, 2007 the current shares owned and |
| held by the fund for less than one year, the gain | | | | the value of investments are: |
| or loss will be a short-term capital gain. Mutual | | | | · Balanced $2,142.83 (118.45 shares) |
| funds gains and losses are netted together and | | | | · Equity Income $2,804.62 (92.32 shares) |
| when the fund has a net gain, that gain is usually | | | | · Multi-Cap Core $2,685.05 (152.30 shares) |
| distributed to the shareholder once a year. | | | | · Specialty Health $3,186.57 (21.20 shares) |
| Net Asset Value (nav) | | | | The accumulative total return (distribution of |
| The net asset value is the current market value | | | | income and capital gains) on these funds is |
| of the mutual fund's holdings (stocks/bonds) per | | | | $10,819.07 +8.19%. If distribution was not |
| share. The market value of a fund is also | | | | received and reinvested, the total return would be |
| referred to as share price. A mutual fund's nav | | | | $10,233.30 +2.33% There is no guarantee of |
| share price is reduced by the amount of | | | | future performance. Always contact the mutual |
| distribution. | | | | fund and read the prospectus before making any |
| Performance | | | | investment. |