10 key terms on your investment statement

Investors regularly receive a variety of documents from their financial advisors and the fund companies that manage their investments. The most important one? The investment statement, which Fidelity calls the FIC statement. It gives you a look at how your portfolio has performed.

Depending on the complexity of your investment portfolio, some of the information on an investment statement may be difficult to understand. Here are ten important things to know about when reading your statement.

1. Frequency

How often you receive investment statements will be an important factor when looking at how your investments have performed. Investment statements, also known as enhanced reports, are available every three months, after each quarter. You may also request or retrieve semi-annual or annual reports for the funds you hold.

Look at the top of your statement: a date range should indicate what period it covers. Here are the dates you usually see:

• Enhanced report, first quarter (Q1): January 1 to March 31
• Second quarter (Q2): January 1 to June 30
• Third quarter (Q3): January 1 to September 31
• Fourth quarter (Q4): January 1 to December 31

2. Adjusted cost base (ACB) or book value

This indicates what you initially paid for your mutual fund investment, plus any dividends that might have been reinvested and any withdrawals you may have made. ACB will increase based on any purchases of the fund, reinvested distributions, and reinvested management fee rebates, and it will decrease if a return on capital distribution has been paid as cash, and if withdrawals are made.

ACB is important for tax purposes for non-registered accounts because it can show you whether you experienced a capital gain or loss if you made a redemption or exchange in your account.

3. Market value

This is the value of your portfolio on a specific date. It’s the unit amount multiplied by the price for each investment held in the account.

4. Unit/share price

The unit price, alternatively called the net asset value (NAV), indicates the asset value of the fund at the end of the day. Net asset value is commonly used to calculate the mutual fund’s value on a specific date. Be aware that the NAV can fluctuate daily.

5. Number of units/shares

Here you’ll see the total number of shares or units of a fund you own.

6. Average cost per unit/share

Because you’re likely buying shares or units over time – maybe a few per month – you’ll be making those purchases at different price points. The average cost per unit is what it sounds like. It’s the average price you have paid for your accumulated shares since you began buying them.

7. Return on investment (ROI)

The ROI tells you exactly how much your investments have grown. Fidelity uses a time-weighted methodology to calculate the rate of return. Accordingly, the return on your investments reflects the performance of your money while invested in the fund, rather than simply how the fund performed. The time-weighted method considers the amount of time invested in the fund and measures how an investment manager performs with the dollars you have invested.

8. Reinvested distribution

This indicates how much income earned from your portfolio goes back into a fund in your account. When this happens, instead of getting the extra cash paid out directly to you, you purchase more units of a fund.

9. Details of activity

Here you’ll see every transaction that took place during the statement period. This could include purchases, redemptions, sales charges, exchanges, fees, and any other activity in the account.

10. Fund series

This represents what type of sales charge or commission compensates your financial advisor for the advice and service they provide you. You will notice different series of funds on your statement – Series A, Series B, Series C, Series D, Series F, Series S, Series T or perhaps something else. If you are a “do it yourself” investor, for instance, you would buy a Series F fund, which doesn’t come with any advisor-related fees. (You may notice more series on your statement. Click here for more information on fund series.)

Bonus term

Value of your account

Each figure represents the gross amount you would receive if you were to cash in all your units on that day.

The more you know about your statement, the better informed you are about how your investments are tracking toward your goal. Still, you may have questions about what you’re seeing; it’s always a good idea to go over your portfolio investment statement with your financial advisor.