"More than a decade ago, the SEC began requiring every mutual fund to prominently disclose investment returns using (then) AIMR (now CFA Institute)-endorsed formats. Fiduciaries -- and the investing public -- regularly use this information by obtaining it directly from a fund's prospectus or indirectly through various mutual fund rating organizations. However, a simple exercise, using easy-to-understand mathematics, reveals a potentially fatal flaw in these reporting standards. How do you, as a fiduciary, know when you've fallen victim to this defect? Better still, what represents a better way you can perform investment due diligence to avoid this terrible trap?"

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