Pay Attention to Your Mutual Fund Holdings

Knowing your mutual fund holdings is important when you are an investor. Knowing exactly what is within your mutual fund can provide you with a lot of valuable information as an investor. The term mutual fund holdings essentially means the assets that the mutual fund owns. A mutual fund is made up of many different securities. For example, it could be comprised of thousands of shares of stock. Some mutual funds will also purchase bonds or other types of securities in order to make up the portfolio. The holdings is the total of the assets that are owned by the fund. 

Where to Find Information

If you are an investor, you need to be able to find the information about your mutual fund. The best place to find this information is in the mutual fund prospectus. The mutual fund prospectus is a document that is distributed by the mutual fund management. Every investor should get a copy of the mutual fund prospectus. When you are shopping for mutual funds, your broker will provide you with documentation about the funds. Within this documentation, you should get a copy of the prospectus and a lot of other information about the fund. You may also be able to get online and go to the website of the company that manages the fund. Many times, you will be able to see exactly what is owned by the fund in this manner.

Why Its Important

Looking at the holdings of a mutual fund is going to tell you a lot about the fund itself. When you look at what the mutual fund company owns, there is no hiding their intentions. For example, a company could easily put out a statement as to what the strategy of the mutual fund is going to be. They might say that the fund is going to be based on investing in growth stocks. However, if you see that they are getting away from growth stocks and focusing on other types of stocks, this does not necessarily match up with what they are saying. Therefore, as an investor, you need to be able to look at exactly what is owned by the company in order to determine if they are doing what they said they would do.

Evaluation

As an investor, you need to continually evaluate your mutual funds. Once you identify the basic strategy at hand, you need to make sure that it matches up with your individual investment goals. If the fund is giving away from your style of investment, you will need to liquidate your shares and find another one.

A prospectus is produced at least every six to 12 months. Take the time to read it and determine if the fund is something that you want to continue to hold. Your fund should reflect your investment strategy, goals and personal preferences.

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