New Delhi, Sept. 27 -- A mutual fund can deliver strong long-term returns and yet leave its investors with much lower gains or even losses if investors enter and exit at the wrong time.

A DSP Mutual Fund report highlights how the timing of investor flows can create a wide gap between a fund's reported returns and the returns actually experienced by investors.

The report uses the example of Kinetics Internet Fund in the US, a star performer during the internet boom, to explain the difference between a fund's reported returns and the returns actually earned by its investors.

Between December 1998 and December 2003, the fund generated a compounded annual return of 8.3%, while investors faced a loss of 11.9%.

The difference does not neces...