| Average Annual Return - AAR | |
 A figure used when reporting the historical return of a mutual fund. The AAR is stated after expenses have been tallied, including administration fees, 12b-1 fees, and others. |
|
 When you are selecting a mutual fund be careful not to depend too much on the AAR as it can be artificially inflated. For example, a fund can be down 25% in the first year, and up 25% in year two, giving an AAR of 0%. But if you had invested $1,000 in the fund, you'd have $750 after year one and $937 (750*1.25) after year two, hardly a 0% return. |
|
 Mutual Fund Basics Tutorial - Learn about the basics--and the pitfalls!--of investing in mutual funds. The Truth Behind Mutual Fund Returns - Fund returns can be skewed dramatically by survivorship bias. Learn more so you won't be misled. Does Size Really Matter? - Is the growth of mutual funds always good? Find out why a bigger fund isn't necessarily better. Digging Deeper: The Mutual-Fund Prospectus - The legal jargon of the document can be daunting, but here's a guide to help you get to the important stuff. |
|
Related Terms
 |