Jul 29 2005
Schwab Fund Buys By The Numbers
Ken Hoover profiles the no-load Schwab Small-Cap Equity Fund (SWSIX) where managers "make buy and sell decisions based on Schwab's proprietary stock selection ratings," in this article from Investor's Business Daily via Yahoo Finance. According to Hoover, "The rating system was created to help Schwab customers pick stocks. Along the line, the discount broker decided to use it to drive the strategy of a series of mutual funds. ...so far the system has worked well for shareholders. The fund is outperforming the S&P 500 and its peer group by comfortable margins."
Jul 28 2005
In this Morningstar Personal Finance piece @ Forbes.com, William Samuel Rocco, "...decided to evaluate the various types of single-country funds and provide some guidance on when and how these offerings should be used--if at all." This article covers developed-market single-country funds, spotlighting Matthews Japan (MJFOX) among Japan funds, and a variety of mutual funds and exchange-traded funds (ETFs) covering Australia, Canada and 10 different European nations. Next month, a companion article will focus on emerging-markets single-country funds.
Jul 27 2005
Bond, Bruce Bond: The Man Behind 'Smart' ETFs
Lisa Scherzer interviews Bruce Bond, president of PowerShares Capital Management about the firm's "smart ETFs," a cross between actively and passively managed portfolios in this article from SmartMoney. According to Scherzer, " Instead of merely tracking a popular stock index, these new (exchange-traded) funds replicate PowerShares' proprietary "Intellidexes," which are designed to beat the benchmarks of traditional index ETFs... The PowerShares strategy seems to be working. Since its May 1, 2003 debut the company's Dynamic Market Portfolio (PWC) has gained 63%, vs. 34% for the S&P 500 index. Its Dynamic OTC Portfolio (PWO), launched the same day, has since climbed 68%, vs. 48% for the Nasdaq Composite."
Jul 26 2005
Keeping Mutual Fund Investing Simple
Scott Burns, of Universal Press Syndicate, compares the long-term performance of two of his low-cost, index-fund model portfolios: the Couch Potato portfolio and the Coffeehouse portfolio, in his personal finance cloumn at the Houston Chronicle. As might be expected, over the last 10 years (ending 2004), the Coffeehouse portfolio, with its overall higher weighting in equities, and its additional holdings in REITs, international stocks, and small-cap stocks, outperformed the Couch Potato portfolio, with its 50-50 weighting in stocks and bonds, 10.84% to 10.36%.
Jul 25 2005
Tech ETFs Move Into the Spotlight
In this article from Standard & Poor's (via Investment Advisor), Angelina Dance, makes a case for investing in the technology sector using exchange-traded funds, "Not only do many ETFs track popular technology indexes and even sub-indexes, they are inexpensive to own, provide immediate sector exposure, and can be bought and sold intraday or sold short by savvy investors looking to make tactical sector bets. In addition to this trading flexibility, ETFs can also be held for the long haul, like open-ended index mutual funds." The article includes some analysis from Scott Kessler, Director of Information Technology Equity Research at Standard & Poor's, and a list of 10 tech ETFs based on three-year annualized returns and standaed deviations.
Jul 22 2005
Coming Soon: the Brokerless ETF
For investors who love to own low-expense exchange-traded funds but hate to pay commissions, it's been a tough environment. But, that may be changing. Here's a first, in a process similar to direct investing in some funds and some companies, the Nasdaq Stock Market is developing a program that would permit investors to buy shares of the Nasdaq-100 Index Tracking Stock Trust ETF directly from them. Set to open sometime in the third quarter, "Investors will pay $1 or $2 at most per trade, dramatically less than most brokerages charge," according to this article from the Associated press via the St. Petersburg Times.
Jul 21 2005
Small-Caps Continue Outperforming
With the Russell 2000 Index hitting new highs, Meg Richards, AP Business Writer, documents the long bull-run for small-capitalization stocks and mutual funds over the past seven years in this article from the Boston Globe. She talks with Vivienne Hsu, portfolio manager of the Schwab Small-Cap Equity Investor fund (SWSIX), and spotlights three Morningstar picks "worthy of consideration, with long-tenured managers, good track records, relatively low fees and disciplined strategies," including Diamond Hill Small Cap (DHSCX), Third Avenue Small-Cap Value (TASCX), and Vanguard Explorer (VEXPX).
Jul 20 2005
Do Mutual Fund Winners Repeat?
For the first time, Standard and Poors has created a new scorecard to measure the consistency of mutual fund performance over time. And, although the results are better than random expectations, it's not a pretty picture. Only 10.7% of large-cap funds, 9.2% of mid-cap funds, and 11.5% of small-cap funds maintained a top-quartile ranking over three consecutive years. Over the same period, just 28.9% of large-cap, 26.4% of mid-cap, and 27.9% of small-cap funds maintained a top-half ranking. Looking at five consecutive years, top-half consistency percentages were smaller at 14.5%, 17.0%, and 18.6% for large-cap, mid-cap, small-cap funds respectively. S&P's full 16-page report, including the top ten funds in each category, is available (in PDF format) here.
Jul 19 2005
Can do-it-yourself investors use a mechanical strategy to beat the market using actively managed no-load mutual funds? In 2002, FundAdvice.com decided to find out and created a study called Brawn, Brains and Index Funds. In a new article just posted on the Web site, Managing Editor Richard Buck reports on three years of data.
Jul 18 2005
Creator of Gold ETF Launches New Oil ETF
Graham Tuckwell has launched another commodity exchange-traded fund, purported to be the worlld's first oil ETF, Oil Securities (OSL), which will trade on the London Stock Exchange. According to the firm, "Oil Securities have been designed to enable investors to gain exposure to oil prices without needing to purchase or take physical delivery of oil or to trade in futures contracts. Investors can then simply buy and sell that interest through the trading of a security listed on the London Stock Exchange." Additional information is available at the Oil Securities web site.
Jul 15 2005
Natural Resources Funds Strike Oil
Natural resources funds hit a gusher the first half of 2005, and they don't show any signs of drying up yet. The average natural resources fund has gained 16.2% this year, vs. a 0.3% loss for the average stock mutual fund. The past five years, natural resources funds have soared 99%. The average fund? Just 6%, according to this article from USA TODAY, via RedNova News.
Jul 14 2005
Ten Surprising Mutual-Fund Facts
Things aren't always what they seem in the fund world. Back by popular demand, here's Morningstar's semiannual listing of 10 interesting fund stats, by Morningstar "Fund Spy," Kunal Kapoor, via MSN Money.
Jul 13 2005
Are utility funds too hot to handle?
Timothy Middleton at MSN Money, takes a hard look at investing in the hot utilities sector. He cites a "dearth of no-load options" where load funds "account for 20 of the 31 in the group, 14 of the 20 most widely held and all but one of the nine funds with four- or five-star ratings from Morningstar." As alternatives to no-load funds, Middleton points to two exchange-traded index funds, Utilities SPDR (XLU) and iShares Dow Jones U.S. Utilities (IDU), but cautions against any investment in the sector now.
Jul 12 2005
Scott Reeves explores foreign investing, covering international and global stocks, American Depositary Receipts (ADRs), and several exchange-traded funds (ETFs) including: The BLDRS Europe 100 ADR Index Fund (ADRU), the BLDRS Asia 50 ADR Index Fund (ADRA), the BLDRS Developed Markets 100 ADR Index Fund (ADRD), and the BLDRS Emerging Markets 50 ADR Index Fund (ADRE), in this article from Forbes.
Jul 11 2005
Simplicity has its rewards when setting portfolio
John Waggoner, personal finance columnist for USA TODAY, makes the case for simplfying your mutual funds portfolio and cites Charles Schwab & Co., as saying you should own no more than three actively managed funds per asset class: Large-company stocks, small-company stocks, international stocks,and one to two bond funds. He also covers rebalancing your fund portfolio, and mentions a few funds to consider, top-performing large-company core funds over the past five years, including: Oakmark Fund OAKMX, Primary Trend PTFDX, UBS US Large Cap Eq A BNEQX, Delaware Large Cap Value A DELDX, and Lord Abbett Large Cap Core A LRLCX.
Jul 08 2005
Mid-Year U.S. Mutual Fund Review
Standard & Poor’s, the world’s leading provider of independent investment research, indices and ratings, has released its half-year review of U.S. mutual fund performance. On average, for the first six months of the year, preliminary data from Standard & Poor’s shows that U.S. stocks funds fell 0.3%, international equity funds gained .57%, high-quality corporate bond funds rose 1.5%, and high-yield bond funds increased 0.8%. The firm provides detailed reports for all four fund categories.
Jul 07 2005
Index Funds with a Little Extra
PowerShares Capital Management uses intelligent screens to separate its offerings from the ETF herd. PowerShares Capital Management is young, relatively small, and about to experience a growth spurt. The latest offerings track sectors such as biotechnology, pharmaceuticals, semiconductors, and software, using a proprietary methodology that seeks to deliver higher returns from indexes based on those industries while lowering volatility. By Richard Diennor, Standard & Poor's Fund Advisor, via BusinessWeekOnline.
Jul 06 2005
Real Estate, Utility Funds Shine in Second Quarter
Small-cap mutual funds had the strongest returns of the second quarter as surging oil prices at the end of June prompted investors to abandon large-cap industrial stocks and move into smaller, more specialized companies. In sector equity funds, real estate-focused funds were the best performers, with average returns of 13.13 percent... By Michael J. Martinez, Associated Press
Jul 05 2005
No-Load Mutual Funds News Round-Up
Mutual Funds: And The Big Winner Is–You! No-Load Funds With Momentum Build Your Own Future Finding the best mututal fund How to Become a Millionaire in Seven Easy (Hah!) Steps
Mutual funds are slugging it out for customers.
It's a frequent admonition in investing that past performance is no guarantee of future results.
Kiplinger's Mutual Funds 2005 will help you make smart and profitable investment decisions.
Dear Armchair Millionaire: I'm beginning to invest and am trying to buy the best mutual funds.
Before you say, "I can't," make sure it's not another excuse.
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