Mutual Fund Investment Calculator

A mutual fund investment calculator is used to analyze a fund's fees and expenses. This is vital in order to see how well a mutual fund performs. If the fund has many fees and expenses, then the investor does not receive the optimal return on his investment.

This information is crucial to the investor. It helps him research a potential mutual fund. He can plug in all of the fees and expenses to see what the ultimate return on investment can be. This will give a true comparison between mutual funds, and not what may be advertised. It evens the playing ground.

It is important for the investor to realize that fees and expenses are not onetime occurrences. Many will occur when purchasing or selling shares of a mutual fund. Some fees occur monthly or annually. Others appear when the shareholder stops making purchases on a regular basis, and there is a fee for inactivity. Finally, there are fees when the investor's account goes below a predetermined level.

Be aware that a fund with high fees does not indicate a better-performing mutual fund. Oftentimes, it means that it provides more income for the broker or mutual fund company only. However, if the fund seems like the correct one for the investor, the mutual fund will have to produce enough return to offset these expenses.

The prospectus should disclose all fees and expenses for a given fund. Read this information carefully. It may be in the fine print.

The Internet has several investment calculators. A good place to start is at the SEC website. They have a web page that has two different calculators that can be used. This website is at: http://www.sec.gov/investor/tools/mfcc/mfcc-int.htm.

The first calculator gives comparisons between three mutual funds. It is put out by the Financial Industry Regulatory Authority (FINRA). It can access information on over 18,000 mutual funds.

The second calculator is put out by the SEC. The investor will have to have a prospectus to use this calculator. Each entry is entered manually. This calculator does not do any fund comparisons.

With the above information in hand, the investor can rest assured that he has thoroughly explored a particular mutual fund. He can feel comfortable that he can choose wisely.