How do you calculate the annual return of a mutual fund?
I understand roughly how mutual funds work, and I'm trying to decide which mutual funds to invest in, but to prove to myself that I understand them, I'm trying to work out the exact math for calculating their exact return in dollars from the fund's public performance criteria. A funds prospectus provides tons of metrics, but I can't find any clear description for how most of these effect the return.
For example, say I invested $1000 in mutual fund ABC, with a NAV per share of $10, a yield of 3.17%, an up-front sales charge of 5%, a 12b1 fee of 0.3%, typical dividend of $0.5 twice a year, and a 5 year average return of 3%. If I invested in that fund for a year, and assuming its return was similar to its 5 year average and the NAV ended at $15/share, how would I calculate my likely overall return?
The formula I think is:
initial_investment = 1000 # $
initial_nav = 10 # $/share
final_nav = 10.5 # $/share
fee_12b1 = 0.03 # percent
sales_charge = 0.05 # percent
typical_biannual_dividend = 0.5 # $
amount_invested = (investment - investment*sales_charge - investment*fee_12b1) = $920
shares = amount_invested/initial_nav = 92
cashout_value = shares*typical_biannual_dividend*2 + shares*final_nav = $1058
Is this correct? Are there other fees or expenses I'm not taking into account? Could this be done more simply by multiplying the return with my initial investment (e.g. $1000 * 1.03)?
