How to Read An Investment Performance Report

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Anyone with an investment portfolio should get a Quarterly, Semi-Annual and Annual Investment Performance Reports. It is imperative that you take the responsibility to read them, understand them and be prepared to make the necessary adjustments so you can meet your investment (retirement) goals and objectives.

Trust me on this: no one is going to volunteer to do this for you. If you feel the need for professional help, do not be afraid to ask. Your biggest risk is not asking questions and face a significant market value loss in your portfolio. You need to understand your portfolio and know how it is performing!

You will need to read my book to see a graphical layout of a Quarterly Investment Report. Below is a description of each column in the reports. Familiarize yourself with them. The Glossary in the back of my book will assist you in this endeavor. You may also go onto the internet and get varying descriptions of these titles.

Every investment report contains the same elements:

  • Name of the Fund
  • Reporting Period (Date)
  • Quarterly Return (Past 3 months)
  • Year to date Returns (Calendar year to Date)
  • 1-year Return
  • 3-year Returns
  • 5-year Returns
  • 10-year Returns
  • Percent of expenses (a percent spent on expenses for every $1,000.00 invested)

Your report will come in columns.

Column A -The Name of the Fund. Here is a short description of each:

  • Bond Index Funds is in a passively managed portfolio of bonds. It will also have a benchmark to compare the returns of other bond funds in the market.
  • Large Cap investments are in companies that have valuations of $10 billion or more.
  • S&P 500 (Standard & Poor’s 500) is a stock market index fund based on the market capitalizations of the 500 largest companies having common stock listed on the New York Stock Exchange.
  • Mid-Cap Fund are companies that have valuations between $2 billion and $10 billion.
  • International Index Fund is a blanket name for investing in a non – U.S. index mutual funds.
  • S&P 600 Small Cap Index is a component of small capitalization companies in the U.S. stock market.

Column B represents (as a percentage (%)), the most recent Return on Investments (ROI) for the past three months (one quarter). If the report is dated for the period ending March 31st, it will match the Year to Date returns.

Keep in mind that returns are always in arrears, meaning the period reported is for the past three (3) months.

Column C represents (as a percentage (%)), the Year to Date (YTD) return on investments. As the year goes forward, the YTD returns will vary according to how well the fund is doing.

If the numbers are similar or the same, that is okay. If the figures are lower, pay attention to them over the next few reporting periods. You want consistent, upward trending returns on your investments based on your perceived level of risk.

Note: Small Cap figures are higher than the S&P 500. This is due to their higher risks/returns.

Column D represents (as a percentage (%)), the annualized Return on Investments (ROI) for the prior calendar year. Each year is a rolling year, which means as you move forward, the prior year is replaced by the new year, and the prior year is rolled into the 3, 5, and 10 returns. Thus, you can get a view of how your portfolio is doing over long periods of time.

Column E represents the prior three (3) year ROI. It is an average for the prior three-year investment period. This gives you a view of how well your investments performed over three years.

Take note of their variations and trends. Are your returns consistently going up or going down?

Column F represents the average prior five (5) year ROI. It is important to note that this five-year period represents what is considered an “Investment Cycle”.

Column G represents your average returns over the past 10-year (or two market cycles). This gives you a great idea of how your long-term investments have performed.

Take a serious look at the trend going from year one to years three, five and 10 years. It is preferable to have consistent growth in these numbers. If the economy did not do well during a given period, it will be reflected in these figures.

Column H represents the fees associated with this particular fund.

The U.S. Supreme Court recently ruled (5/18/2015) that employers have a duty to keep watch over 401(k) plans to guard against high management fees that can erode retirement savings.

Below represents the fees associated with a particular fund based on an investment of $1,000.00.

• Asset Allocation – 1.25% x $1,000 = $12.50 fee

• Short Term Investments – 1% x $1,000 = $10.00 fee

• Diversified Real Return – 5.25% x $1,000 = $52.50 fee

Most mutual funds are passively managed funds and considerably less fees than actively managed funds. There is always the dilemma in the industry of which is the better choice, Active versus Passive mutual fund portfolio management. While this is a discussion for another time look at “Exchange Traded Funds”. Are Actively traded mutual funds.

It is very important to pay attention to fees because of what is called “Load versus No-Load Fees”.

  • A Loaded Fund has up-front administrative fees to get into the fund.
  • A No-Load means there is no up-front costs to get into the fund.

I must point out that all funds charge some kind of administrative fee to operate their fund. This fee can be anywhere from 0.10% up to 1%. Reading the Prospectus will provide you with the administration and expense fees associated with your fund.

The key to this blog is to learn how to read your Investment Performance report

Remember – you are the manager of your portfolio. Study and review your reports. Your financial future is up to you!

On Monday we will talk about the two most important words in investments: Asset Allocation and Diversification.

Have a great weekend1

R. LaMont W.

Robert L Woods

Robert L Woods

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About Me

Robert L. Woods is the retired partner of the Institute For Fiduciary Education ( that provided investment seminars for public and private pension funds, endowments and institutional fund managers. He spent 28 years working for the State of California, as a budget and financial analyst which includes 16 years as an Investment Officer for the California State Teachers’ Retirement System (CalSTRS). At CalSTRS, he established it as one of the nation’s first institutional home loan programs with a down payment assistance component. He also spent 13 years on the Board of Trustees for the Sacramento County Employees Retirement System (SCERS). He was a Trustee with the University of California, Davis, Cal Aggie Alumni Association and a member of the Chancellor’s Council on Community & Diversity. He is a Life Member: Phi Beta Sigma Fraternity, Inc., Theta Gamma Sigma Chapter, Sacramento, CA.

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