When reviewing historical performance for several funds, Registered Representatives should compare funds with similar investment objectives and evaluate their 1-, 5- and 10-year average annual total returns. For more information, contact each company specifically. In addition, the following economic benefits of mutual funds should be considered when determining the total return performance of a mutual fund:

• Dividend Distribution: On a periodic basis, a mutual fund will distribute to shareholders its net investment income from stock dividends and/or interest from bonds. Stock funds typically declare dividends quarterly, while bond funds typically distribute interest on a monthly basis.
• Capital Gain Distributions: On an annual basis, a mutual fund will distribute to its shareholders any net capital gains generated from portfolio transactions.
• Capital Gain at Redemption: If the investor sells shares in the fund for more than their purchase price, the investor benefits from capital appreciation, or a capital gain.

Total return is measured only when an investment is sold. Total return illustrates what an investor would have received if he or she had purchased the investment, received distributions and then sold the investment at the end of the designated time period, such as year-to-date or one year. Work through the following example to see how all the factors work into a fund's total return.