Understanding your investment statements

August 2019 – As you receive your semi annual mutual fund statements, be careful not to confuse “Book Value”, “Cost Base”, and “Market Value”. For mutual funds or pooled funds, “Book Value” and “Cost Base” are not how much you have invested. Rather, these are terms used for tax purposes and include: • What you have invested, plus • Interest you earned and re-invested, plus • Dividends you earned and re-invested, plus • Capital gains distributed and re-invested. For example: You invested $100,000 in ABC Mutual Fund. Over the years, your fund distributed and re-invested interest, dividends and capital gains totalling $60,000. The market value today is $170,000. Your book value would be $160,000 ($100,000 + $60,000), and your market value would be $170,000. This means your actual gain (profit) is $70,000, not $10,000.