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Friday, May 26, 2006

Kiplinger's Best No-Load Mutual Funds

Starting with approximately 8,000 mutual funds from which to choose, Steven Goldberg, of Kiplinger's Personal Finance, takes the annual look at the magazine's top 25 stock and bond no-load funds. He also describes how to use Kiplinger's picks to build portfolios for different goals, time frames and levels of risk tolerance, provides comparison tables for the 25 best funds, and reviews the results of last year's mutual fund picks. For all the details, see the article here.
(permalink) -- Posted by KenW

Thursday, May 25, 2006

Financial Adviser Describes ETF Portfolio

Murray Coleman, of Investor's Business Daily, interviews Allan Roth, president of Wealth Logic, who has found exchange traded funds to be a strong alternative to traditional mutual funds. Roth explains why, and shares his current portfolio which includes five ETFs and one mutual fund: Vanguard Emerging Markets (VWO), Vanguard European Index (VGK), Vanguard Pacific Index (VPL), Vanguard REIT Index (VNQ), Vanguard Total Stock Market Index (VTI), and Vanguard Precious Metals & Mining (VGPMX). For details, see the Investor's Business Daily article here, via Yahoo Finance.
(permalink) -- Posted by KenW

Wednesday, May 24, 2006

A Case for Buy-And-Hold Strategy

Betsy Schiffman, of the Associated Press, advises mutual fund investors to resist urge to sell, in this article from Herald News Daily. She says, "It may seem shrewd to sell before your losses worsen, but doing so means you're running the risk of losing longer-term profits" and notes that "... investment analysts say people who hold tight to their mutual funds during a correction are usually better off in the long run."
(permalink) -- Posted by KenW

Tuesday, May 23, 2006

A Case for Balanced Mutual Funds

In context of the stock market's recent swoon, Gail MarksJarvis makes a case for balanced funds in this article from the Baltimore Sun, and spotlighs three funds "... mentioned for strong, reliable performance... Bruce Fund, with a return of 9.7 percent so far this year, and an average annual return of 38.7 percent for the last three years; Fidelity Balanced Fund, up 3.5 percent for this year, and 14.2 percent on average for the last three, and Mairs & Power Balanced, up 5.3 percent this year, and 11.6 on average for the last three."
(permalink) -- Posted by KenW

Monday, May 22, 2006

Mutual Funds and Dogs

Chuck Jaffe, MarketWatch, has penned an amusing piece about how working with dogs and with mutual funds is similar. He offers six things your dog could teach you about mutual funds: 1) Don't change your life for your fund; 2) Sometimes, a short leash is just the thing; 3) Reward good behavior by giving the fund what it wants; 4) Dogs -- and funds -- don't always play well together; 5) Dogs and funds both need their space, but will come back to you; and, 6) If you fear the bark, fear the dog. For details, see the article .
(permalink) -- Posted by KenW

Friday, May 19, 2006

Interest Rate Pause May Send Bond Funds Higher

Jeremy Herron, of the Associated Press, says that, "Investors who have grown accustomed to an environment of rising interest rates will want to think about adjusting their strategies when the Federal Reserve takes a break from further rate increases." According to Lipper data, "The average taxable bond fund return has been 2.41 percent since May 2005, down from 5.10 percent over five years. Year-to-date, the performance has been dramatically worse, a slim 0.42 percent return." Herron reports that "analysts say some [bond funds] will benefit more than others from a pause in rate hikes," and he explains in more detail in this article from the Contra Costa Times.
(permalink) -- Posted by KenW

Thursday, May 18, 2006

Four Reasons to Own Mutual Funds

In this article from Fool.com, stock investor, Rick Aristotle Munarriz, describes four reasons to buy mutual funds: 1) Sharp insight from sharp minds; 2) Treading where your feet never touch the ground 3) Pocket change adds up 4) Diversify, diversify, diversify.
(permalink) -- Posted by KenW

Wednesday, May 17, 2006

Jane Bryant Quinn on Mutual Funds and Investing

Jane Bryant Quinn, author of best-selling financial books and a columnist for Newsweek, explains the pros and cons of saving, investing and diversification in this Warren Boroson article from the Daily Record. Quinn favors target funds, life-strategy funds, and index funds from such no-load fund families as Vanguard, Fidelity or T. Rowe Price. She also gives her views on a wide range of personal finance issues and topics including: Social Security; private and public pensions; 529 College Savings Plans; prospects for long-term bonds, intermediate-term bonds, municipals; tax-deferred variable annuities; and offers her four basic principles of investing.
(permalink) -- Posted by KenW

Tuesday, May 16, 2006

Update: Exchange-Traded Funds

There are many articles about exchange-traded funds (ETFs); this one by John Waggoner, USA TODAY, is one of the best to come along in quite a while. Waggoner says, that "ETF assets have soared to $322 billion from $226 billion at the end of 2004. ETFs are now the fastest-growing segment of the mutual fund industry." He details all of the reasons why they're so hot, covers "All-ETF" funds, and includes three tables listing: the Top ETFs The Past Three Months, the Top International ETFs The Past 3 Years, And How The Largest ETFs Have Fared.
(permalink) -- Posted by KenW

Monday, May 15, 2006

Vanguard Opens New Dividend Exchange-Traded Fund

John Spence, MarketWatch, reports on the launch of Vanguard's new dividend ETF, the Vanguard Dividend Appreciation Index Vipers (VIG), which tracks the Mergent Dividend Achievers Select Index. He also highlights the other competitive dividend ETfs, and notes that the Vanguard fund has the lowest expense ratio (0.28%), not including broker commissions, among the group. In the MarketWatch article, Spence says, "Vanguard also has filed a registration statement with regulators for a pair of index funds and matching Vipers ETFs designed to track another of the U.S. market's hottest segments: midcap stocks."
(permalink) -- Posted by KenW

Friday, May 12, 2006

A "Tilt" Strategy for Mutual Funds

John Waggoner, a personal finance columnist for USA Today, describes how giving your mutual fund portfolio a 'tilt' may help boost your returns. In this article, he outlines the strategy "used by institutional investors [to] create a "tilt" portfolio. Start with a core holding, such as an index fund. Then add a specialized fund to tilt the portfolio's returns in one direction." Waggoner offers A few suggestions and mutual funds for: a Tech tilt, ICON Information Technology (ICTEX); a Health tilt, T. Rowe Price Health Sciences fund (PRHSX); and a Financial tilt, Royce Financial Services (RYFSX), and provides a table of different types of funds which may work with the tilt strategy, those least correlated with the S&P 500.
(permalink) -- Posted by KenW

Thursday, May 11, 2006

Fidelity Magellan Pays Out 18+% of Assets

Ken Hoover, of Investor's Business Daily, reports that "Shareholders of Fidelity Magellan (FMAGX) awoke Monday to the startling news that their mutual fund paid out more than 18% of its assets, subjecting some of them to an unexpected tax bill." He says this can be attributed to major reworking of the portfolio by its new portfolio manager, Harry Lange, who took the reins just over six months ago. Hoover added, "The good news is that Lange's changes have... boosted the fund's performance. Under his skippering, Magellan was up 10.18% year to date... compared with 6.78% for the S&P 500. But over the past five years, the fund returned an average annual 2.08%, which lags the benchmark's 3.82%." For more details, see the IBD article via Yahoo Finance.
(permalink) -- Posted by KenW

Wednesday, May 10, 2006

Fixed-Income Mutual Funds vs. Bonds

Meg Richards, of the Associated Press, compares and contrasts bonds and fixed-income mutual funds in this AP article from the Ft. Wayne Journal Gazette. She notes, "For most of us, experts say, funds are a probably better deal because they offer greater diversity at a lower price tag," and says that for bond investors using a "ladder" strategy, that "it's high-maintenance and can be costly [due to] transaction fees..." Richards interviews experts Paul Herbert, an analyst with Morningstar, and Douglas McGinley, fixed income portfolio manager for Fidelity Investments, and mentions the following index and no-load mutual funds: Vanguard's Total Bond Market Index (VBMFX), which tracks the Lehman Brothers Aggregate Bond Index; and Baird Aggregate Bond Fund (BAGIX); Harbor Bond (HABDX); Fidelity Investment Grade Bond (FBNDX) and Dodge & Cox Income (DODIX).
(permalink) -- Posted by KenW

Tuesday, May 09, 2006

14 Mutual Funds that Compete with ETFs

Dan Culloton, one of Morningstar's ETF (exchange-traded funds) specialists, has noted that "some conventional mutual funds often stand up quite well to the cost and tax challenges posed by exchange-traded funds." He acknowledges, "that ETFs are cheaper and more tax efficient than most traditional mutual funds," and says, "but they don't trump them all. In fact, it's fairly easy to find a list of no-load conventional open-end mutual funds... that can compete with ETFs on costs, tax efficiency, and performance." In this article from Morningstar, via Yahoo Finance, Culloton list 14 mutual funds that give "ETFs a run for their money."
(permalink) -- Posted by KenW

Monday, May 08, 2006

Some Psychology of Investing

How do we let our emotions get in the way of our investments? Betsy Schiffman, of the Associated Press, interviews three experts who point out some of these and other psychological pitfalls. In one case, George Loewenstein, a professor at Carnegie Mellon University, collaborated on a study last year that found that "people who had suffered brain damage made better financial decisions than those who hadn't. The study found that emotionally impaired participants invested more often... [and] earned more, too." Loewenstein said, "People with emotional lesions invested at a very high rate, while normal people, if they lost money, they got discouraged. If they won a few times, they got nervous that their luck wasn't going to hold out." See the complete article at the Lexington Herald-Leader for more.
(permalink) -- Posted by KenW

Friday, May 05, 2006

Barclays Global Launchs 10 New iShares Subsector Funds

Barclays Global Investors announced today that 10 iShares Dow Jones Subsector Index Funds have begun trading on the New York Stock Exchange. These exchange traded funds (ETFs) are the newest additions to the largest sector ETF product line in the United States, now totaling 35 funds with more than $16 billion. The Dow Jones US Select Subsectors covered include: Oil Exploration & Production Index, Oil Equipment & Services Index, Pharmaceuticals Index, Healthcare Providers Index, Medical Equipment Index, Investment Services Index, Insurance Index, Regional Banks Index, Aerospace & Defense Index, and Home Construction Index. The Funds' annual expense ratios are 0.48%.
(permalink) -- Posted by KenW

Thursday, May 04, 2006

Mutual Funds Up in April; Smaller Gains than March

Ken Hoover, Investor's Business Daily, notes that, "U.S. stock mutual funds managed small gains in April, thanks to advances among energy, industrial or commodity-based stocks." And he reports, "For the month, the average diversified domestic stock fund gained 1.03%, compared with a 2.24% gain in March. Value funds did better than growth. Large cap did better than small. The best-performing style was large-cap value, up 2.4%. The worst was large-cap growth, up 0.04%." For details and some analysis, see the article via Yahoo Finance.
(permalink) -- Posted by KenW

Wednesday, May 03, 2006

Mutual Funds Asset Growth Rate Slows

David Saito-Chung reports that "The growth rate in assets for mutual funds has slowed sharply in recent years...," in an Investor's Business Daily article via Yahoo. He said, "From the end of 2000 to the end of 2005, total net assets among all U.S. mutual funds ... grew from $6.96 trillion to $8.91 trillion, according to the Investment Company Institute.... That's equal to 5.1% growth compounded annually. ...it's only a third of the 15% annual growth fund companies enjoyed from 1982 to 1999..." Lou Harvey, head of Dalbar Inc., a mutual fund research firm, said in the article, [he] "believes mutual funds face real competition from exchange traded funds (ETFs), or baskets of selected stocks that trade real-time during market hours. ETFs have grown rapidly because they allow diversification and more flexibility in trading as well as provide good value for their cost."
(permalink) -- Posted by KenW

Tuesday, May 02, 2006

Money Manager's Top 10 Mutual Funds

Andrew Feinberg, a columnist with Kiplinger's Personal Finance ("The Promised Land"), the co-author of four books on investing, and the president and portfolio manager of his own money management firm, spotlights his ten favorite, mostly no-load, mutual funds in this article at his Kiplinger's "Money Monster" blog.
(permalink) -- Posted by KenW

Monday, May 01, 2006

The Quest for Mutual Fund Stars

Extensive research has shown that actively managed mutual funds perform no better than index funds and their past performance is no indicator of future returns. So then why do investors continue to comb through records in search for the top mutual fund? Many researchers have chalked up the answer to irrational behavior, but not Jonathan Berk, an associate professor of finance at UC Berkeley's Haas School of Business. In an article that recently won an award on scholarly writing from the financial services firm TIAA-CREF, Berk concluded that such behavior makes sense. Click here for a summary of Berk's article.
(permalink) -- Posted by KenW