Be aware that the mutual fund historical data graphs at both Google Finance and Yahoo! Finance (and perhaps other sites) do not correctly calculate the total return of a fund.  This can be very misleading when comparing a fund’s performance to an index or to another fund.

For example, you might want to know whether a particular mutual fund performed better than the overall market.  Let’s use Fidelity Magellan (FMAGX) as an example.

If you compare FMAGX to the S&P 500 Index for 2007 at Google, you get a graph like this:

The blue line is the value of the mutual fund and the red line is the value of the index.  Looks like they came out about even, right?  So the mutual fund did no better than the index.  Not so, mon frere.  Take a closer look.  Continue Reading »