Understanding the Enhanced FINRA Fund Analyzer: A Comprehensive Guide

The Financial Industry Regulatory Authority (FINRA) is committed to providing investors with the tools they need to make informed decisions. One such tool is the FINRA Fund Analyzer, a resource designed to help investors evaluate and compare different investment funds. In the second quarter of 2021, the Fund Analyzer received several key enhancements. This guide will walk you through these improvements, explaining how they can help you better analyze your investment options.

What is the FINRA Fund Analyzer?

The FINRA Fund Analyzer is a free online tool that allows investors to analyze mutual funds, ETFs, and other investment products. It helps you compare fund costs, assess potential returns, and understand the impact of fees on your investment portfolio. Think of it as a handy assistant that brings transparency to the often complex world of fund investing.

Key Enhancements to the FINRA Fund Analyzer (Q2 2021):

1. Duplicate Fund Analysis

• What it is: This new "Duplicate" function allows users to analyze the same fund multiple times, configuring it in different ways.
• Why it matters: You can now evaluate fund values, costs, and other factors for the same fund under different scenarios. This feature enhances your ability to make side-by-side comparisons of different investment strategies.
• Further Reading: Types of Calculations Available in the Fund Analyzer.

2. Transaction ("Clean") Share Analysis

• What it is: Evaluation of trades for traditional mutual fund share classes, ETFs, ETNs, money markets, as well as transaction (or "clean") mutual fund shares. "Transaction Shares" refers to any share where a transaction generates a sales load or commission after the initial investment.
• Why it matters: This feature is especially useful for understanding the impact of transaction costs and fees on your investments, providing a clearer picture of your returns. If you're looking at different share classes or funds with varying fee structures, this tool will allow you to compare "apples to apples".
• Further Reading: How to Configure the Fund Analyzer for Transaction (“Clean”) Share Calculations.

3. Trade Cost and Annual Turnover Evaluation

• What it is: Advanced options have been added to support the evaluation of trades using prospectus-based or brokerage commission-based pricing.
• Why it matters: Allows you to factor in pricing differences (load vs. no load or transaction share fees) depending on where assets reside.
• Further Reading: The analyzer's section on Advanced Options shows how to evaluate trades using prospectus-based or brokerage commission-based pricing.

4. Account Aggregation Toggle

• What it is: The ability to turn account aggregation on or off has been implemented.
• Why it matters: Disabling aggregation treats trades as separate transactions, which is useful for transaction ("clean") shares that might not default to allowing account aggregation

5. Ticket Charges

• What it is: The impact of ticket charges (flat fees for buy, sell, or exchange transactions) is now factored into the Analyzer's results.
• Why it matters: Understanding all costs associated with trading is essential. This helps in making informed decisions about when to trade.
• Further Reading: Learn more about how ticket charges impact your analysis.

6. Enhanced Search Results

• What it is: The fund search results have been improved, making it easier to select funds for "duplicate" analysis.
• Why it matters: A streamlined search process saves time and reduces the likelihood of errors when selecting funds. This allows you to focus on analysis rather than navigation.

7. Integrated Analysis Details

• What it is: All aspects of the fund analysis and reference information have been moved to the results page.
• Why it matters: All relevant fund details are now in one place, making it more convenient to review and understand the analysis without navigating multiple pages—improving the ease with which users can parse through information .

8. Return Over Time Analysis

• What it is: Calculates account values for your funds across returns from -20% to 20% and holding periods from 1 to 20 years.
• Why it matters: By reviewing the values surrounding your holding period and return, you can better assess the impact of these changes on your funds, helping you understand how sensitive a particular investment is to different market conditions.

9. Trade Frequency Analysis

• What it is: For "transaction" shares, the analyzer calculates account values for trading frequencies from annually to every 20 years and holding periods from 1 to 20 years.
• Why it matters: Assess the impact of trading frequency changes your funds and return on your funds, assisting you in understanding how changes can impact your investing.

10. Average Annual Returns

• What it is: Each fund's 1, 3, 5, 10, and since inception return data now includes an "as-of" date.
• Why it matters: Knowing the exact date when return data was last updated is a crucial element of transparency, making sure you're working with the most current information.

11. Improved Printing Capabilities

• What it is: The print function has been redesigned for easier printing or saving analyses as PDFs.
• Why it matters: The ability to save and share analyses is essential. This function streamlines this process, improving the overall user experience.

How to Use the FINRA Fund Analyzer

For detailed instructions on using the Fund Analyzer and understanding its features, consult the Help page provided by FINRA.

Conclusion

The FINRA Fund Analyzer continues to evolve as a valuable tool for investors. The Q2 2021 enhancements focus on providing greater flexibility, transparency, and analytical power. By understanding and utilizing these new features, investors can make more informed decisions about their investment portfolios. To stay informed on future updates and useful investing tips, check out FINRA's Investor Insights. Questions or Suggestions about the Fund Analyzer? Send FINRA an email.