How to Monitor Your Fund

How can you check your stock mutual fund’s performance against fund benchmarks presented in this report?

You’ll need to find out two things:

* Your fund’s “total return” for the third quarter and the first nine months.

* The category into which the fund fits (growth, small-company, international, etc.) according to the Lipper Analytical rankings.

You should be able to get both questions answered by simply calling your fund’s service representative. Be sure, when asking for the return for the quarter and year-to-date, that you specify total return, which counts both price appreciation and dividend income, if any.

Once you have your fund’s numbers, compare them to the averages for the fund’s category.

Keep in mind that the average is just that--the mid-range of performance. That means that about half the funds will have performed above that level and about half below it.

Just because your fund lags behind its category average for a quarter doesn’t necessarily indicate a problem. Experts say performance ought to be judged on a long-term basis.

And keep in mind that returns should be judged in relation to risk. Slow-growing funds are often slow-growing for a reason: They take less risk than their more aggressive peers. Conservative funds may not lead in an up market, but neither are they likely to fall as far in a down market.