Comments on: Mutual Fund Return Lies: Average Annual Return vs Compound Annual Growth Rate

By: rajesh ruparel

rajesh ruparel — Sat, 07 Nov 2009 13:49:47 +0000

i invested $50,000 in 1995 in S&P 500 index fund, when S&P was 600. now in 2009 after 14yrs the balance in my fund is only 35,000. whereas S&P is right now at 950 something. what happened to my funds. i thought it would have become 75,000.or more. where did they or S&P lie

By: Anonymous

Anonymous — Fri, 11 Sep 2009 20:09:41 +0000

Not true. In the 1990’s you would’ve been right about your assumptions. A lot of funds calculated returns in various ways, including arithmetic mean. However, since the late 90s, Mutual funds are required to use a calculation for returns that has been set forth by the SEC. This is a total return formula that assumes all dividends and interest are reinvested. It is not complicated but is far from a simple arithmetic average.

By: When Returns Lie Part II « Evolution of Wealth

When Returns Lie Part II « Evolution of Wealth — Thu, 10 Sep 2009 22:22:39 +0000

[...] their clients. I also recommend Average Long Term Returns vs. Compound Annual Growth Rate and Mutual Fund Return Lies: Average Annual Return vs Compound Annual Growth Rate which both help support my [...]

By: 120 Minus Your Age In Stocks: The New Asset Allocation Rule Of Thumb - Amateur Asset Allocator

Wed, 17 Jun 2009 11:02:11 +0000

[...] of 8.1% in 2007 and is up 4% year-to-date 2009 (as of 5-31-2009). Overall, the fund has posted an average annual compound return of 1.12% per year over the past 3 years. I don’t know about you, but I consider a 1% [...]