There's a relationship between net asset value (NAV), yield, and total return, but it's complicated. Did you know that a fund's NAV can fall and you can still make money? Or that a fund can yield less than 1%—in fact, it can yield nothing at all—and yet its returns can still be at the top of the charts?

Before we go further, though, let's review the two key components of total return. You can earn money from your investment in two ways: income (often called yield) and capital appreciation.

Next: Income and Capital Appreciation >>