Analysis of Consumer Reports’ recommended mutual funds compared to actual performance

This study examines 60 mutual funds presented in the February 2007 issue of Consumer Reports. In addition, data for the same group of mutual funds were obtained as of 30 September 2008 to evaluate the recommendations provided in Consumer Reports. In order to exclude the major declines that occurred in the stock market in October 2008, the time periods of 30 November 2006 and 30 September 2008 were analyzed in this study. Specifically, this research examines the relationship between mutual funds’ net assets, share prices, manager tenures, expense ratio, tax–cost ratio and annualized returns to see whether Consumer Reports is a reliable source for investors seeking to purchase mutual funds.