Even with the same mutual fund, performance differs. Before comparing your investment returns with others

Buying the same product does not guarantee the same returns

“I’m investing in the same mutual fund, but that person’s balance is higher.” Have you ever looked at someone else’s account screen on social media and wondered if your own approach is wrong?

However, even with the same product, investment results will vary if the timing of when you started buying or the amounts you added along the way are different. This is also true if you choose mutual funds linked to the All Country World Index (ACWI), the S&P 500, or the NASDAQ 100. Having the same product name does not mean the conditions for comparison are the same.

Before looking at someone else’s numbers, it is important to also look at “when and how much was bought to achieve that result.”

If the timing of your purchases is different, the number of units you hold is also different

Let’s think about the mechanism with a simple example. Suppose the net asset value (NAV) of a mutual fund drops from 10,000 yen per 10,000 units to 8,000 yen, and then returns to 10,000 yen. The NAV corresponds to the price of the mutual fund.

Person A, who bought 10,000 yen worth at the beginning, holds 10,000 units. If the final NAV is 10,000 yen, the valuation is also 10,000 yen, and the profit or loss is zero.

On the other hand, Person B, who bought 10,000 yen worth when the price was 8,000 yen, holds 12,500 units. When the final NAV reaches 10,000 yen, the valuation is 12,500 yen. The profit is 2,500 yen.

This is a hypothetical scenario to show the difference in purchase timing, not the actual performance of real people or products. Distributions, fees, and taxes are not considered. Even if you check the same product on the same day, the results will differ simply because the purchase timing is different.

However, you cannot know at the time which day was cheap until you look back later. This example does not mean that you should just wait until the price drops.

The price movement of the product and your own investment performance are also different things

Now, let’s consider the case where you buy 10,000 yen worth at each of the three points mentioned earlier.

The number of units you can buy is 10,000, 12,500, and 10,000. The total is 32,500 units. If the NAV is 10,000 yen immediately after the final purchase, the valuation will be 32,500 yen, resulting in a profit of 2,500 yen against a total purchase amount of 30,000 yen.

Even though the product’s NAV is the same at the beginning and the end, the investment plan shows a profit. This is because you were able to buy more units for the same amount of money when the price was lower in the middle.

Conversely, if you bought a lot when the price was high in the middle, your performance might look worse than the overall price movement of the product. The results of an investment plan are influenced not only by price movements but also by the order and amount of money invested.

Note that this example is also a calculation based on the assumption that the price returns. If the decline continues, you will incur a loss even if you are investing regularly. The Financial Services Agency also explains that mutual funds and similar products carry the risk of principal loss.Financial Services Agency “Basics of Asset Formation”

Do not judge based solely on “plus X percent”

When looking at the percentage on your investment screen, check what the number is based on. The meaning differs depending on whether it is the current unrealized gain relative to the purchase amount or the investment result over a certain period.

For example, even if it says “plus 10%,” the result over six months is not the same as the result over five years. If you have made additional purchases or sales along the way, a simple comparison becomes even more difficult.

Also, if you divide the 2,500 yen profit from the investment example earlier by the total purchase amount of 30,000 yen, it is about 8.3%. However, you cannot call this figure an “annual return of 8.3%.” This is because it does not take into account the period of investment or the length of time each amount of money was invested.

Even if you find someone with higher numbers, that alone is not a reason to switch products or increase your investment amount.

If you are going to compare, look back at your own plan

There is nothing wrong with using others’ performance as a reference. It can be a way to learn about how products work. However, you should avoid using results based on different conditions than your own as a direct benchmark for success or failure.

Decide on a day to check, such as once a month, and record the total amount purchased so far, the current valuation, and whether you were able to invest without strain. Just doing that alone will make it easier to see the movement of your money.

Rather than a short-term profit competition, are you able to continue without disrupting your household budget, in line with when you plan to use the money? When reviewing your investments, don’t forget to keep that perspective in mind.

Key Points

・Even with the same mutual fund, performance will vary if the purchase timing or amount is different. ・View the product’s price movement and your own investment performance separately. ・Do not compete based solely on profit margins; check the time period, calculation methods, and your own plan.

※This article provides general information and is not individual investment advice.

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