Mutual Fund Benchmarks

Comparing a fund to its relevant benchmarks shows how the fund is performing in relation to other funds and investments in the same category. For example, the S&P 500 Index is commonly used as a benchmark for large-cap company performance because its holdings include many of the companies in this subclass. Therefore, if an equity fund concentrates in large-cap companies, you can gauge its performance by comparing it to the S&P 500 Index.

It's important to remember that comparing one mutual fund to another might not be an apples-to-apples comparison. For example, comparing returns from a real estate fund to those of a mid-cap fund would not be a useful benchmark.

Investors should consider the investment objectives, risks, charges, and expenses of a mutual fund carefully before investing. A prospectus contains this and other information. A mutual fund prospectus is available through or through a Scottrade branch office. The prospectus should be read carefully before investing.