The right fund at the right price.Finding investments with high returns at low prices Before you place your hard-earned dollars in a mutual fund, find out if you re getting your money's worth. First, you should know the difference between a load fund--one with an up-front up-front or up·front Informal adj. 1. Straightforward; frank. 2. Paid or due in advance: up-front cash. adv. sales charge Sales Charge A commission or fee paid by an investor at the time of purchasing mutual fund shares. The charge is paid to a mutual fund salesperson or financial advisor and is intended to provide compensation for the financial salesperson's efforts in assisting their client select that typically ranges from 4% to 8%--and no loads that are purchased directly from the fund company. Why should this matter? Sales charges reduce the amount of money you initially invest. Moreover, there is no correlation correlation In statistics, the degree of association between two random variables. The correlation between the graphs of two data sets is the degree to which they resemble each other. between sales charges and fund performance. "Why would you even consider purchasing a higher priced product when you can get the same thing at a lower cost?" asks Sheldon
Sheldon may refer to: Places
Still, nothing comes free in life--including no loads. In addition to front-end front-end adj. 1. Of or relating to the initial phase of a project: a front-end investment. 2. Of or relating to the forward parts of a vehicle: a front-end alignment. or back-end (programming) back-end - Any software performing either the final stage in a process, or a task not apparent to the user. A common usage is in a compiler. A compiler's back-end generates machine language and performs optimisations specific to the machine's architecture. sales fees, they all charge operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , which include: * Management fees: The figure--usually 0.5% to 1% of the fund's annual assets--a company pays an advisor to manage a portfolio. * 12(b) 1 fees: The expense that fund companies pass on to investors to pay for marketing and advertising costs. (A fund can't charge over 25 basis points--or 0.25%--a year and still be considered a no-load fund.) * Redemption fees Redemption fee A fee some mutual funds charge when an investor sells shares within a specified short period of time. : Designed to prevent heavy turnover, the charge is levied when you redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. your shares. * Maintenance fees: If your balance falls below a certain minimum, many funds will charge you for maintaining the fund--usually $10 to $50 annually. So, how do you know if you are, indeed, getting the most out of your investment? "The best way to check how much it is going to cost you [to invest] is to look at a fund's expense ratio," says Michelle A. Smith, managing director of the Mutual Fund Education Alliance, a Kansas City Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Missouri-based trade group. "[It] is an indication of how high or low a fund's fees are." According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the fund tracker Morningstar Inc. in Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , the average U.S. stock fund has an expense ratio--the percentage deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. each year for costs--of about 1.42%, which means you pay $14.20 per $1,000 invested. To review the funds with the lowest expense ratios and best returns (as of the end of the first quarter of 1999), see the charts on this page. Top 10 Funds With Lowest Expense Ratios (ranked by 1-year annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. returns)
Total Return(*)
Fund name Category 1-yr 3-yr 5-yr
Janus Mercury LG 58.41 33.01 19.90
Norwest Advant Large Co Gr I LG 43.39 35.75 28.75
Turner Ultra Large Cap LG 41.20 -- --
Strong Blue Chip 100 LG 39.79 -- --
Accessor Growth LG 37.84 34.40 29.97
Chase Equity-Growth LG 35.67 33.91 26.72
Value Line Leveraged Gr Inv LG 34.43 29.57 26.64
Vanguard Growth Index LG 30.79 34.94 30.63
Prudential Jenn Growth Z LG 30.01 -- --
Bridgeway Ultra-Large 35 Idx LB 29.38 -- --
Expense Min. Initial
Fund name Ratio Purchase
Janus Mercury 0.97 2,500
Norwest Advant Large Co Gr I 1.00 1,000
Turner Ultra Large Cap 1.00 2,500
Strong Blue Chip 100 1.03 2,500
Accessor Growth 0.93 5,000
Chase Equity-Growth 1.00 2,500
Value Line Leveraged Gr Inv 0.86 1,000
Vanguard Growth Index 0.22 3,000
Prudential Jenn Growth Z 0.83 No Min.
Bridgeway Ultra-Large 35 Idx 0.75 2,000
Fund name Phone Number
Janus Mercury 800-525-8983
Norwest Advant Large Co Gr I 800-338-1348
Turner Ultra Large Cap 800-224-6312
Strong Blue Chip 100 414-359-1400
Accessor Growth 800-882-9612
Chase Equity-Growth 888-524-2730
Value Line Leveraged Gr Inv 800-223-0818
Vanguard Growth Index 800-662-7447
Prudential Jenn Growth Z 800-225-1852
Bridgeway Ultra-Large 35 Idx 800-661-3550
(*) As of 3/31/99 Source: Morningstar Category: LG (large growth); LB (large blend “Blending” redirects here. For alpha blending, see Alpha compositing. In linguistics, a blend is a word formed from parts of two other words. These parts are sometimes, but not always, morphemes. ); LCG LCG LHC (Large Hadron Collider) Computing Grid LCG Living Church of God LCG Linear Congruential Generator LCG Learning Computational Grammars LCG Low Center of Gravity LCG Liquid Cooling Garment LCG Longitudinal Center of Gravity (large cap growth); E (equity); G (growth); SH (specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. health) Top 10 Funds With Lowest Expense Ratios (ranked by 3-year annualized returns)
Total Return(*)
Fund name Category 1-yr 3-yr 5-yr
White Oak Growth Stock LCG 35.47 35.80 33.56
Norwest Advant Large Co Gr I LG 43.39 35.75 28.75
Vanguard Growth Index LG 30.79 34.94 30.63
Accessor Growth LG 37.84 34.40 29.97
Chase Equity-Growth LG 35.67 33.91 26.72
Northeast Investors Grth E 29.93 33.74 29.18
Harbor Capital Appreciation LG 33.02 32.21 28.79
Janus Growth & Income LG 34.87 31.78 24.31
Preferred Growth G 30.82 31.01 25.32
Ameristock LB 19.80 28.00 --
Expenses Min. Initial
Fund name Ratio Purchase
White Oak Growth Stock 1.00 2,000
Norwest Advant Large Co Gr I 1.00 1,000
Vanguard Growth Index 0.22 3,000
Accessor Growth 0.93 5,000
Chase Equity-Growth 1.00 2,500
Northeast Investors Grth 0.94 1,000
Harbor Capital Appreciation 0.68 2,000
Janus Growth & Income 0.96 2,500
Preferred Growth 0.84 1,000
Ameristock 0.90 1,000
Fund name Phone Number
White Oak Growth Stock 888-462-5386
Norwest Advant Large Co Gr I 800-338-1348
Vanguard Growth Index 800-662-7447
Accessor Growth 800-882-9612
Chase Equity-Growth 888-524-2730
Northeast Investors Grth 800-225-6704
Harbor Capital Appreciation 800-422-1050
Janus Growth & Income 800-525-8983
Preferred Growth 800-662-4769
Ameristock 800-394-5064
(*) As of 3/31/99 Source: Morningstar Category: LG (large growth); LB (large blend); LCG (large cap growth); E (equity); G (growth); SH (specialty health) Top 10 Funds With Lowest Expense Ratios (ranked by 5-year annualized returns)
Total Return(*)
Fund Name Category 1-yr 3-yr 5-yr
White Oak Growth Stock LCG 35.47 35.80 33.56
Vanguard Growth Index LCG 30.79 34.94 30.63
Vanguard U.S. Growth LCG 29.43 34.01 30.45
Vanguard Health Care SH 24.82 27.12 30.33
Janus Mercury G 65.10 33.62 30.33
Accessor Growth G 37.84 34.40 29.97
Northeast Investors Growth LB 30.25 32.50 29.31
Harbor Capital Appreciation LCG 33.02 43.01 28.79
Fidelity Dividend Growth LB 22.84 29.83 28.78
Janus Growth & Income LCG 32.16 33.00 28.02
Expense Min. Initial
Fund Name Ratio Purchase Phone Number
White Oak Growth Stock 1.00 $2,000 888-462-5386
Vanguard Growth Index 0.22 3,000 800-662-7447
Vanguard U.S. Growth 0.40 3,000 800-662-7447
Vanguard Health Care 0.36 3,000 800-662-7447
Janus Mercury 0.97 2,500 800-525-8983
Accessor Growth 0.93 5,000 800-882-9612
Northeast Investors Growth 0.94 1,000 800-225-6704
Harbor Capital Appreciation 0.68 2,000 800-422-1050
Fidelity Dividend Growth 0.92 2,500 800-544-8888
Janus Growth & Income 0.96 2,500 800-525-8983
(*) As of 3/31/99 Source: Morningstar Category: LG (large growth); LB (large blend); LCG (large cap growth); E (equity); G (growth); SH (specialty health)3 |
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