|Expense Ratio (net)||0.67%|
|Category||Intermediate Core-Plus Bond|
|Last Cap Gain||0.00|
|Morningstar Risk Rating||Average|
|Beta (3Y Monthly)||0.94|
|5y Average Return||N/A|
|Average for Category||N/A|
|Inception Date||Mar 31, 1997|
Actively managed mutual funds typically carry higher fees and expenses than index funds and exchange-traded funds (ETFs), explaining why passive products have long been stealing market share from active funds.Another cost irritant associated with some active mutual funds is the load. A mutual fund load is real nuisance because it is a charge that goes to compensate a middleman, someone in between the investor and the fund issuer. Like any other fee, mutual fund loads can be drags on investor outcomes, which is never a positive thing.Given the peskiness and, arguably, lack of necessity associated with loads, it is easy to understand why investors who like mutual funds really like no-load funds. While many no-load mutual funds still carry higher costs than passively managed ETFs and index funds, the good news is that saving on loads enhances investors' returns.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 5 Dividend Stocks Perfect for Retirees Here are some no-load mutual funds to consider. American Century High-Yield Municipal Fund Investor Class (ABHYX)Expense Ratio: 0.6% per year, or $60 on a $10,000 investment.The American Century High-Yield Municipal Fund Investor Class (MUTF:ABHYX) requires a minimum investment of $5,000, but at least this is a no-load mutual fund and its expenses are below those found in the category average.This fund focuses on high-yield municipal debt and is "designed to provide shareholders with a high level federal tax-free income while maintaining low exposure to the Alternative Minimum Tax (AMT)," according to the issuer.ABHYX has a portfolio turnover of 49%, a 30-day SEC yield of 3.27% and a trailing-12-month yield of 3.8%. The fund's average duration is 5.5 years and about half its holdings are rated A, BBB or BB. Fidelity Balanced Fund (FBALX)Expense Ratio: 0.53%Fidelity has long been a giant in the world of actively managed mutual funds, but the firm has recently been asserting its dominance in the passive spaces, even offering several no-fee index funds and some of the cheapest ETFs on the market. Part of Fidelity's low-cost push has been to eliminate minimum investments, so not only is the Fidelity Balanced Fund (MUTF:FBALX) a no-load mutual fund, it does not have minimum investment, either.This no-load mutual fund has been around for nearly 34 years and has low expenses compared to the category average, a better return profile and a five-star Morninstar rating.As a balanced fund, FBALX holds both stocks and bonds. Its equity lineup is considered large-cap blend, but has often leaned toward large-cap growth. The technology and healthcare sectors combine for about 33% of FBALX's equity lineup. * 10 S&P 500 Stocks to Weather the Earnings Storm FBALX's bond roster spans more than 10 fixed-income categories, including Treasuries, investment-grade corporate debt and junk bonds. Vanguard Equity Income Investor Shares (VEIPX)Expense Ratio: 0.27%Just by the name, you should expect the Vanguard Equity Income Investor Shares (MUTF:VEIPX) to be a no-load mutual fund because Vanguard is a low-cost leader. Vanguard funds are among the industry's least expensive, and loads are not in the issuer's language.Because VEIPX "typically invests in companies that are dedicated to consistently paying dividends, it may have a higher yield than other Vanguard stock mutual funds," according to Vanguard. "The fund's emphasis on slower-growing, higher-yielding companies can also mean that its total return may not be as strong in a significant bull market."This fund holds 191 stocks with a median market value of $119.6 billion. Nearly a third of the fund's weight is allocated to financial services and healthcare names. VEIPX does require a $3,000 minimum investment. Oakmark Intenrnational (OAKIX)Source: USAFAExpense Ratio: 0.96%The Oakmark Intenrnational Fund (MUTF:OAKIX) is a no-load mutual fund for investors seeking international equity exposure. The investor class of this fund, which is highlighted here, has a minimum investment of just $1,000."Oakmark International invests in a diversified portfolio of common stocks of non-U.S. companies. The fund generally focuses on mid- and large-cap companies, though small-cap companies are also eligible for investment," according to Oakmark. * 7 Stocks to Buy for Spring Season Growth This mutual fund can be used as an alternative to passive EAFE (Europe, Asia and Far East) funds because OAKIX has similar geographic exposures, though the fund is significantly underweight Japan relative to the MSCI EAFE Index. The U.K. and Germany combine for 36% of the fund's geographic exposure. This is a targeted fund, a trait not often seen among passive EAFE strategies, as OAKIX holds just 61 stocks. Metropolitan West Total Return Bond Fund (MWTRX)Source: Shutterstock Expense Ratio: 0.67%The Metropolitan West Total Return Bond Fund (MUTF:MWTRX) is an actively managed alternative to passive aggregate bond funds. MWTRX usually has a duration of two to eight years and an average maturity of two to 15 years.The fund can invest in "corporate bonds, notes, collateralized bond obligations, collateralized debt obligations, mortgage-related and asset-backed securities, bank loans, money-market securities, swaps, futures, municipal sercurities, options, credit default swaps, private placements and restricted securities," according to the issuer.At the end of last year, the bulk of MWTRX's holdings were Treasuries, U.S. government agency debt and mortgage-backed securities (MBS), ensuring the fund's credit quality was high. Vanguard Mid-Cap Index Fund -- Admiral Shares (VIMAX)Expense Ratio: 0.05%For investors looking for a cost-efficient, no-load mutual fund focusing on mid-cap stocks, the Vanguard Mid-Cap Index Fund -- Admiral Shares (MUTF:VIMAX) is one of the better options to consider. VIMAX is cheaper than 95% of competing funds, according to Vanguard data. It requires a minimum investment of $3,000.This no-load mutual fund is a mid-cap blend fund, meaning its 368 holdings include both growth and value stocks. The median market value of VIMAX's holdings is $14.7 billion, meaning this fund actually resides in the lower end of large-cap territory.Financial services, industrial and technology stocks combine for over 55% of the fund's weight. This no-load mutual fund carries a five-star Morningstar rating. * 7 Stocks That Can Outperform for Years "Vanguard Mid-Cap Index is one of the best funds available for U.S. mid-cap stock exposure," according to the research firm. Fidelity New Markets Income Fund (FNMIX)Expense Ratio: 0.84%.For investors willing to take on more risk with their fixed-income investments, the Fidelity New Markets Income Fund (MUTF:FNMIX) is a compelling option. This Fidelity fund, which does not have a minimum investment, targets emerging markets bonds. Due to the risks associated with emerging-markets debt relative to U.S. government bonds, emerging markets bond funds usually carry higher yields. FNMIX fits that bill with a 30-day SEC yield of 5.6% and trailing-12-month yield of 4.8%.The fund's average maturity is just over 11 years. Credit quality is usually the primary consideration with emerging-markets bond funds and FNMIX is no different. This no-load mutual fund allocates about 64% of its weight to bonds rated BBB, BB or B, indicating a fair amount of the fund's holdings carry non-investment-grade ratings.Mexico, Turkey and Brazil are FNMIX's largest geographic exposures. The fund, which has a four-star Morningstar rating, has a duration of 6.48 years.As of this writing, Todd Shriber did not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 Dividend Stocks Perfect for Retirees * 7 Reasons the Stock Market Rally Isn't Over Yet * 10 S&P 500 Stocks to Weather the Earnings Storm Compare Brokers The post 7 No-Load Mutual Funds to Buy appeared first on InvestorPlace.
Active mutual funds get a bad rap. Although, some of that criticism is well deserved. The truth is most active managers fail to beat their benchmarks and chronically underperform. Because of this, many investors have turned to index investing and ETFs to get their market fix.The reason for so much indexing love, and perhaps the cause of why active mutual funds tend to fail, comes down to cost.Active funds generally cost more than their cheap indexing rivals. Those higher costs are a hurdle that managers must clear before they can tack on any gains. Think about it. An active mutual fund with an expense ratio of 1.25% needs to make that 1.25% first, before it can chase its benchmark. With ETFs charging just 0.03% these days, the ball is in their court.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut here's the thing -- not all active mutual funds are bad. In fact, many can and do clear their higher fee hurdles, offer higher active shares and actually *gasp* beat their beat their benchmarks over time. It's here that investors can get higher returns. Adding a smattering of these active funds to a cheap indexed core portfolio can do wonders. * The 10 Best Stocks to Buy for the Bull Market's Anniversary With that, here are five active mutual funds worthy of their expenses.Source: Shutterstock T. Rowe Price QM U.S. Small-Cap Growth Equity (PRDSX)Expense Ratio: 0.79% or $79 per $10,000 invested. Minimum Investment: $2,500One of the best places to find active mutual funds worth owning is in the small- and mid-cap spaces. In this market cap size, there's more chance to values and great growth stories as Wall Street analysts tend to ignore smaller stocks. And that's just what the T. Rowe Price QM U.S. Small-Cap Growth Equity (MUTF:PRDSX) has been doing since the late 1990s. It looks like one of the best funds in its niche.Fund manager Sudhir Nanda combs through the broader small-cap world by using screens tied to valuation, quality and momentum. Those stocks that meet the standards are included in the portfolio's holdings. Right now, that's 300 stocks, including EXACT Sciences Corporation (NASDAQ:EXAS) and Fair Isaac (NASDAQ:FICO). However, no stock makes up more than around 1.25% of PRDSX's portfolio.The best part is that Nanda and his screens have made PRDSX a top performer.Since 2006 when Nanda became the head manager, PRDSX has managed to beat the S&P 500 by an average 2.7 percentage points a year. Moreover, when looking at its benchmark- the MSCI US Small Cap Growth Index- PRDSX has beaten it over the one-, three-, five- and 10-year periods. And pretty significantly at that.Nanda and his team at PRDSX are clearly adding value for investors and are worth the active mutual funds' 0.79% expense ratio. Fidelity Focused Stock (FTQGX)Expense Ratio: 0.82% Minimum Investment: NoneOne of the best parts about index investing is the diversification involved. So, you want your active fund to perform differently than an index, it can't look like an index. One of the other great ways to beat the market is by concentrating your picks. So-called high-conviction funds only hold a handful of stocks that the managers believe will provide great returns. Instead of 500 stocks, you only get 40. And in that, you get better returns.The Fidelity Focused Stock (MUTF:FTQGX) is one of the best funds at turning concentrated bets into bigger gains.As the name implies, FTQGX is focused on a few stocks. In this case, the active mutual fund will own between 30 and 80 different names. These can be either growth or value stocks that the managers think will outperform over the longer haul. Lately, the active mutual fund's focus has been on growth names, holding only 38 stocks. Healthcare and technology stocks dominate the mutual fund's top holdings. These include Amazon (NASDAQ:AMZN) and AstraZeneca (NYSE:AZN).The fund's results prove that it's high-conviction strategy is a winner.FTQGX has crushed the S&P 500 over its life. The fund has managed to beat the broader index over the 3-, 5- and 10-year periods. Perhaps the biggest win for the mutual fund came last year. As the S&P lost money, the Fidelity Focused Stock mutual fund managed to produce a positive 5.32% return. * 7 Top Stocks to Buy From Goldman Sachs' Secret Portfolio When it comes to active mutual funds, FTQGX is one of the best funds to buy.Source: Shutterstock Vanguard International Growth Fund Investor Shares (VWIGX)Expense Ratio: 0.45% Minimum Investment: $3,000Vanguard is the king of indexing. But the asset manager is pretty good when it comes to active mutual funds as well. A prime example is the Vanguard International Growth Fund Investor Shares (MUTF:VWIGX).International stocks have been a mixed bag since the recession. Like U.S. stocks in the previous decade -- marked by the dot com crash and great recession -- international equities are nearing a so-called lost decade of performance. Indexing in the stocks of Europe, Japan and other developed markets would have netted you basically nothing. Active managers, however, have done much better. VWIGX over the past 10 years, managed to return an average annual 9.52%. That's nearly double its benchmark -- the MSCI World ex-USA Index.VWIGX's excess return comes from its strategy.The fund is dually managed by Baillie Gifford Overseas and Schroder Investment Management at roughly a 60/40 spilt. Baillie Gifford runs a more traditional growth sleeve for its assets. This means paying for stocks that are rapidly growing sales. This has it diving head-first into emerging markets and international tech firms. Schroder's is more of value seeker and uses growth-at-a-reasonable price, or GARP, investing strategy to find bargains. The combination provides fast growth with some stability. That allows for less volatility and overall better returns.And with a Vanguard-low expense ratio, investors are able to keep more of those returns -- even for this actively managed mutual fund.Source: Shutterstock Metropolitan West Total Return Bond (MWTRX)Expense Ratio: 0.67% Minimum Investment: $5,000Bonds and fixed-income investments tend to be another area that active mutual funds can outperform their indexes. That's because many bond indices are rigid in their construction and/or are weighted on the amount of debt. Total return or go-anywhere bond funds allow their mangers to buy what they view is a best bet at the time. Because of that, top active managers in the fixed income space can and do earn returns above their benchmark indexes.That includes the Metropolitan West Total Return Bond (MUTF:MWTRX).The $71 billion behemoth is surprisingly nimble for a bond fund and can really go anywhere to find a good total return -- that is price appreciation and dividends. According to its mandate, the mangers at MWTRX can own corporate bonds, collateralized debt obligations, mortgage-related and asset-backed securities, bank loans, money-market securities, swaps, futures, municipal securities, options, credit default swaps, private placements and restricted securities. And it doesn't matter if they have interest rates that are fixed, variable or floating. It really can own it all.And owning it all has been a great strategy. * 7 Dow Jones Stocks to Buy MWTRX has managed to crush its benchmark -- the Bloomberg Barclays U.S. Aggregate Bond Index- by a mile. Over the last 10-years, the active mutual fund has returned 5.51% annualized. This is versus just a 3.48% annualized return for the index. No wonder why the fund has a four-star rating and a Gold recommendation from Morningstar.Source: Studio Incendo via Flickr (Modified) Matthews Pacific Tiger Fund (MAPTX)Expense Ratio: 1.08% Minimum Investment: $2,500Emerging markets hold plenty of promise and those in Asia are particularly primed for growth. However, how do you know which is a good nation or bad, or which stocks can capitalize the best to take advantage of the potential. Separating the wheat from the chaff takes an active touch and a real boots on the ground approach.That's exactly what the Matthews Pacific Tiger Fund (MUTF:MAPTX) does.Matthews Asia only does Asian-focused mutual funds and separate managed accounts. This expertise has allowed the firm to before better than many of its benchmarks and indexes. This includes MAPTX -- one of its flagship funds.MAPTX bets on stocks in countries and markets in Asia, including developed, emerging, and frontier countries but excluding Japan. However, the bulk of the fund's holdings lie within developing and emerging markets. Sure, China is included … but so is Thailand, Malaysia and Indonesia. This different concentration as well as the fact that the fund only holds about 60 stocks has allowed MAPTX beat its benchmark -- the MSCI All Country Asia ex Japan Index -- over the long haul. Over the last 5- and 10-year periods, MAPTX has beaten the index by roughly 1.5 percentage points per year. Since its inception in 1994, it's more than doubled its performance.Clearly, Matthews has the winning formula in its specialty and has managed to clear its expense ratio hurdle with ease.At the time of writing, Aaron Levitt did not have a position in any of the active mutual funds mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy Under 15x Earnings * 7 Dark Horse Stocks That Deserve Your Attention in 2019 * 5 Disruptive Technologies That Are Moving Too Fast Compare Brokers The post 5 Active Mutual Funds Worth Their Expenses appeared first on InvestorPlace.
The fund has greater latitude than Fidelity Total Bond, and it has used that flexibility to dial down credit and interest-rate risk in recent years. Unfortunately for the fund, those risks have generally paid off, even with rates rising more recently.
Note: This article is part of Morningstar's 2019 Portfolio Tuneup week. My Aggressive Retirement Saver Portfolio is designed for an aggressive beginning investor who expects to retire 40 years hence. Given that it's designed to take advantage of the younger investor's ultralong runway--and his high tolerance for short-term volatility--it featured more than 90% in stocks, including healthy dollops of small-cap and international stocks, as well as emerging-markets equities.
Note: This article is part of Morningstar's 2019 Portfolio Tuneup week. My answer, in short, is that the Bucket Approach--essentially segmenting a portfolio by time horizon--is most useful for retirement planning. Not only does an in-retirement Bucket Portfolio provide ready cash reserves if the long-term components of the portfolio are at a low ebb (and, therefore, not good candidates for selling) but in better market environments, it also facilitates easy rebalancing to shake off income for living expenses.
Note: This article is part of Morningstar's 2019 Portfolio Tuneup week. Seventy-five years ago, the average remaining life expectancy for a man reaching age 65 was 12.7 years, and 14.7 years for a 65-year-old woman, according to Social Security Administration data.
A rising-rate environment poses challenges for income investors. After all, when interest rates rise, bond prices fall. At times like this, a seasoned bond-fund manager can be an income investor's best friend. At Kiplinger, we prefer mutual funds with solid long-term records - and managers with tenures to match. Also, we prefer funds with below-average volatility for their category, and we keep a close eye on a fund's size because a gargantuan asset base makes managing a fund difficult. And, of course, low operating costs are crucial for our funds - all actively managed - to overcome the biggest advantage of index funds: microscopic expense ratios. When it comes to investing for income in choppy markets, these six bond funds - culled from the list of our favorite low-fee mutual funds - stand out. SEE ALSO: 53 Best Dividend Stocks for 2018 and Beyond