How to Evaluate the Daily Price Change of a Mutual Fund

Compare price changes in your mutual funds with the stock market performance.

Compare price changes in your mutual funds with the stock market performance.

Mutual funds usually consist of stocks, bonds, money-market funds and other securities or assets. The combined holdings in your financial portfolio provide you with diversified strategies, so you have a wide range of investments to lower your investment risk. You can’t analyze fund performance as you do with an individual stock, which can be checked throughout the day. Because mutual funds hold a variety of investments, price changes typically become available after the stock exchange closes.

Daily Availability

You don't need the anxiety of watching a stock rise or fall. That's why you probably chose a mutual fund. People often invest in mutual funds as an easy strategy for long-term investing, although you can buy and sell funds whenever you choose. Mutual fund companies set a valuation of the price once a day. Techniques of valuation vary among companies. Some companies, for instance, may average the last three traded prices. Most often, you can find the price of a mutual fund after the end of the trading day.

Net Asset Value

The mutual fund price depends on its net asset value, or NAV. Unlike a stock price, which you can find hour-to-hour or even second to second, finding a price to buy or sell a mutual fund depends on its NAV when it’s posted daily. The fund might not calculate until hours after you purchased or redeemed shares. Buying or selling a mutual fund at the right time might mean waiting till the price has been determined after the market closes in most cases, depending on the fund.

Finding the Price

You can find the NAV or your mutual fund performance by checking stock market reports at the end of the day or for the previous day. Look under mutual find listings online at various stock websites or in the financial and daily newspapers. The mutual fund company itself also posts daily price changes on its website. The company lists the current NAV with the particular day as well as the dollar and percent change over one day and the year-to-date change. The price chart also includes highs and lows for the year.

Compare the Fund

Consider the NAV along with the highs and lows during the year when you evaluate of the daily price change. Compare the fund price to the stock market in general. The price may go up or down with the stock market, but a good balance of stocks and bonds rises and falls less than the stock market to keep stability over the long term. An aggressive growth fund can do much better than the stock market, but drop lower than the market on bad days. In some cases, a mutual fund can surprise even the most knowledgeable investors and do better than anticipated. The risks and rewards determine how long you want to stay in that particular fund.

Trust and Research

Professional money managers select and monitor investments in your mutual fund, so you feel in good hands. However, you don’t have full control of your investments in the fund. Fund managers can buy and sell securities at any time. You can’t be sure of the exact timing of those trades and have to trust the expertise of the fund managers. Because mutual funds are usually long-term investments, doing research on how the fund has performed over several years plays an important role when you decide to purchase the fund.

About the Author

Jerry Shaw writes for Spice Marketing and LinkBlaze Marketing. His articles have appeared in Gannett and American Media Inc. publications. He is the author of "The Complete Guide to Trust and Estate Management" from Atlantic Publishing.

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