Investments, tenth edition

www.ici.org 

), the national association of mutual 

funds, closed-end funds, and unit investment trusts, publishes an annual  

Directory of 

Mutual Funds  that includes information on fees as well as phone numbers to contact funds. 

To illustrate the range of information available about funds, we consider Morningstar’s 

report on Wells Fargo’s Advantage Growth Fund, reproduced in  Figure 4.5 . 

 The table on the left labeled “Performance” first shows the fund’s quarterly returns 

in the last few years, and just below that, returns over longer periods. You can compare 

returns to both its standard index (the S&P 500) and its category index (the Russell 1000) 

in the rows labeled  1 /2 Index, as well as its percentile rank within its comparison group, 

or category. Continuing down the left column we see data on fees and expenses, as well 

as several measures of the fund’s risk and return characteristics. (We will discuss all of 

these measures in Part 2 of the text.) The fund has provided good returns compared to risk, 

earning it the coveted Morningstar 5-star rating. Of course, we are all accustomed to the 

disclaimer that “past performance is not a reliable measure of future results,” and this is 

true as well of Morningstar’s star ratings. Consistent with this disclaimer, past results have 

little predictive power for future performance, as we saw in  Table 4.4 . 

    4.8 

Information on Mutual Funds  

bod61671_ch04_092-116.indd   110

bod61671_ch04_092-116.indd   110

6/18/13   8:35 PM

6/18/13   8:35 PM

Final PDF to printer

---

  C H A P T E R  

4

  Mutual Funds and Other Investment Companies 

111