- Mutual fund research requires certain basic techniques.illustration with personal computer and diagram image by Alexander Potapov from Fotolia.com
More than 10,000 mutual funds are based in the U.S., according to Investopedia. Mutual fund research demands time and resources, especially given that mutual fund companies often run families of funds in various investment categories. As the fund industry continues to grow, mutual fund research has expanded into a business, which has seen research companies such as Morningstar and Thomson Reuters' Lipper become leading brand names. Average mutual fund investors can benefit from research techniques that help them screen the number of funds under consideration and compare results of performance analysis and risk assessment. - Mutual fund screening is a useful technique that can help reduce the vast number of mutual funds to a manageable level based on an investor's research criteria. An investor may be interested in only equity funds as opposed to fixed-income, or funds that are no-load, meaning they have no up-front transaction fees. Or the investor may prefer certain fund companies and want funds within specified categories such as emerging markets, small-cap growth, or one the sectors such as energy, agriculture or home improvement. A screener designed with such features would show a list of funds that meet the set conditions. Most funds have minimum investment requirements, so it saves time if funds that an investor cannot afford are first filtered out.
- Mutual fund comparison is a technique that is used for side-by-side evaluation of selected mutual funds. Brokers often provide their customers such a research feature along with a mutual fund screener. With a shorter list of potential fund matches from fund screening, an investor can enter a few mutual fund symbols for a detailed comparison on price, performance, expense, Lipper ratings on various returns, and the major investments of the fund. Chosen funds from each comparison can then be put together for further evaluation
- Using a basic mutual fund tracker or analyzer is a way to get the most comprehensive price information about a particular mutual fund. Brokers and mutual fund research companies such as Morningstar all display on their websites a simple search box often labeled "quote." Depending on what specific fund information is pre-loaded into a provider's software, once a fund ticker symbol is entered, the quote can show various information about the fund, including latest price, capital appreciation, year-to-date performance, dividend yield, largest fund holdings, ranking in fund category, risk ratings and management.
