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Once you have set your goals, established your objectives,
determined your time horizons and understand your risk tolerance,
it is time to select a mutual fund. Carefully read each fund's
prospectus and consider the following factors.
Factors To Consider When Evaluating Mutual Funds |
Factor |
Key Questions |
Notes |
| Fund Objectives |
- Does the fund match your goals and objectives for the long term?
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| Expenses |
- How do the fund’s expenses compare to the average comparable fund?
- Are there sales charges or 12b-1 fees?
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| Portfolio Manager Tenure |
- How long has the portfolio manager been in this role?
- Does the fund have a strong performance record created by someone who has since left?
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| Fund Performance |
- How does the fund’s performance compare to that of its peers?
- In addition to the past few months or year — how strong is the fund’s long-term performance?
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| Risk |
- Will you have the perseverance to hold the fund when the market is down?
- How does the fund’s risk level compare to similar funds?
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| Taxes |
- Has the fund generated large taxable distributions?
- Does it have a high portfolio turnover rate that may lead to tax inefficiency?
- Is the fund about to make a large capital gain or dividend distribution?
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Basic Money Management
Basic Money Management
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