Mutual Fund return formula?

What is the formula (or simply the "name" of the formula) to determine the return of a mutual fund given the following: 1. list of indiv. investments within the fund & 2. performance of the items in 1 (assuming both 1 & 2 are from the same period of time)?

Howdy Enoriverbend,

Your answer is quite detailed & appreciated - but not what I'm looking for. I'm sure this is due to two faults on my part:
1. I left out an element in my question:
the "weight" of each investment within
the mutual fund (ie: assume I would
already have this info.).
2. I used the term "mutual fund" as the
best example of a sum of investments
which I could think of.

Let me put this another way: Say I have
three investments (as part of my retirement plan, etc) and all three are mutuals. I can find out how each one performed by simply checking with the supplied stat's from the fund. But, what is the formula for finding how all three investments did as a "whole" (ie: how did "my" choices perform as a whole)?

Thanks for your patience,

If I understand your question correctly, there is no such formula for ordinary mutual funds, although there may be an approximation for index funds and ETFs. It sounds like you're just looking for an alternate way to calculate total return after fees.

In an ordinary managed mutual fund, stocks are bought and sold over the duration of whatever fiscal period you are looking at -- let's say it's a fiscal quarter. You can get a list of the individual stock/bond/etc holdings at the end of Q1 and a list from the end of Q2, but it says nothing about when during those 3 months stocks were bought and sold. So if you took the list of holdings and then subtracted the management and execution fees, you would still probably be far off the actual fund return. (By the way, this is also true for index funds, but to a lesser degree, since the indexes do change from time to time, and the execution of the buy/sells might not precisely match anyway. There is always a little 'drift' away from precisely matching the index.)

In the case of non-managed ETFs, since the stocks are already "in hand" when you purchase the ETF share, you can come fairly close by just subtracting the management fees from the change in the underlying security values -- but why bother, since the NAV values are accurately reported?

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Oh, thanks for the clarification. I believe you're asking about the 'personal rate of return'.

If you have a Q1 balance and a Q2 balance and you invested nothing more during Q2, it's easy to figure out the total or personal rate of return. But as soon as you introduce additional invested funds during the period, it gets harder. Look at one of these and see if it describes what you wanted:

http://www.fiscalagents.com/newsletter/4...
http://www.rbcam.com/pdf/tools/daily_val...

If you have Excel or another spreadsheet that supports the 'internal rate of return', you might find this useful:

http://news.morningstar.com/classroom2/c...