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Chapter 17. Determine How You Will Know ... > Making Performance Comparisons

Making Performance Comparisons

It is obviously important when considering the performance of a mutual fund to measure its performance correctly. It is also critical to make fair comparisons and judgments both in terms of time and benchmarks.

Consider the Strong Growth Fund, a $2.8 billion no-load fund in the large-cap growth category.[6] This fund had a return of 75 percent for 1999 and –9 percent in 2000: How did this fund perform? On average, over the two years, it had a return of [(+75 –9) /2], or 33 percent, a seemingly outstanding performance. However, we need to analyze this in more detail:

[6] This information is based on data supplied by the fund in its prospectus and its publications.


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