Step 1
Go to www.morningstar.com (Or look up funds via Kiplinger.com’s free Fund Finder tool), type in a fund’s name or symbol, and click on “performance.” Look for year-to-date or one-year returns. Thanks to the bull market, many stock funds have been doing well lately. “That makes it hard to draw conclusions,” says Christine Benz, Morningstar’s director of personal finance. So examine the fund’s five- and ten-year returns, too.
Tool: Kiplinger's Mutual Fund Finder
Step 2
Get context for your fund’s performance by comparing it with average returns for its group and with an appropriate benchmark, such as the Russell 2000 index for small-company stock funds. Also look at how a fund did in 2008 (an awful year for stocks), and compare that with how it has performed over the past five years. A fund with a defensive strategy would likely have done better than most in 2008 but would have lagged as stocks rebounded. For aggressive funds, the opposite would be true.
Step 3
If your fund did badly in both periods, start digging: Check annual shareholder reports to see if the fund changed its strategy. If it did, consider whether the fund still meets your needs. If it didn’t, put the fund on your watch list, or give it the boot. Think of the big picture as well. “Look at all of your holdings, and make sure your portfolio is well diversified,” Benz says. “You don’t want everything moving in the same direction.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The payoff
You’ll know when to hold a fund—and when to sell.
For more great fund resources, check out The Kiplinger 25, our favorite no-load mutual funds, as well as our Mutual Fund Finder tool, which can help you better tailor your portfolio.
-
How Lower Interest Rates Affect Your Finances: Credit Cards, Car Loans and MortgagesThe Fed's rate cut will provide relief for some borrowers, but savers will have to work harder to get decent returns.
-
Four Ways to Maximize Your 401(k) Contributions Before the Year EndsTo maximize your 410(k) contributions in 2024, assess how much you’ve contributed so far, check your employer’s match, take a look at your budget and consider increasing how much you set aside per paycheck.
-
The 5 Best Actively Managed Fidelity Funds to Buy Nowmutual funds In a stock picker's market, it's sometimes best to leave the driving to the pros. These Fidelity funds provide investors solid active management at low costs.
-
The 12 Best Bear Market ETFs to Buy NowETFs Investors who are fearful about the more uncertainty in the new year can find plenty of protection among these bear market ETFs.
-
Don't Give Up on the Eurozonemutual funds As Europe’s economy (and stock markets) wobble, Janus Henderson European Focus Fund (HFETX) keeps its footing with a focus on large Europe-based multinationals.
-
Best Bond Funds to BuyInvesting for Income The best bond funds provide investors with income and stability – and are worthy additions to any well-balanced portfolios.
-
Vanguard Global ESG Select Stock Profits from ESG Leadersmutual funds Vanguard Global ESG Select Stock (VEIGX) favors firms with high standards for their businesses.
-
Kip ETF 20: What's In, What's Out and WhyKip ETF 20 The broad market has taken a major hit so far in 2022, sparking some tactical changes to Kiplinger's lineup of the best low-cost ETFs.
-
ETFs Are Now Mainstream. Here's Why They're So Appealing.Investing for Income ETFs offer investors broad diversification to their portfolios and at low costs to boot.
-
Do You Have Gun Stocks in Your Funds?ESG Investors looking to make changes amid gun violence can easily divest from gun stocks ... though it's trickier if they own them through funds.
