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¶ … Opportunity' Knocking?" By Jonathan Burton
Available online: http://online.wsj.com/article/SB120398831088492289.html?mod=money_page_left_hs
In the February 26 edition of the Wall Street Journal, Jonathan Burton lists mutual funds that promise to weather the storms raging on the global and domestic markets. Mutual funds managers are taking advantage of depressed stock prices by snatching up bargains, notes Burton. The time is ripe now for normally timid investors to branch out, expand their portfolios, and move into the arena of mutual funds. Shopping for mutual funds can be made easier with an increased array of opportunities like there are now.
As Burton notes, however, investment in the newly created funds is a long-term project. Investors must have patience when buying up shares in mutual funds that are underperforming now -- but will deliver returns in the future. Funds that previously shut down because of market woes are re-opening themselves to investors. Although they involve a certain degree of risk, most offer long-term solutions for riding out market waves. Among the newly re-opened mutual funds are Dodge & Cox, Longleaf, and First Eagle Global.
Of these Dodge & Cox is the most well-respected for stability and long-term investment potential. The fund includes Wachovia, Motorola, and Comcast. Longleaf is also primarily about American holdings with General Motors, Sprint Nextel, and new performers Walgreens and Symantec. Burton mentions one with primarily European performers: Tweedy Browne Global Value, with holdings that include Heineken and Nestle.
The Burton article is a valuable and brief resource for personal investors. Anyone wishing to move their investments, shifting into what might be low-risk and high-return ventures for the years to come might want to consider taking Burton's advice. Investing in newly re-opened mutual funds means buying into them at depressed prices and although returns might take years to manifest, the payoffs will be solid. Moreover, the funds Burton mentions allow investors to branch out into non-U.S. markets.
Mutual Fund Manager Definition of the Fund Manager Position and Major Responsibilities Securities and Exchange Commission defines a mutual fund as a company that pools money from many investors and invests the money in stocks, bonds, short-term money market instruments, other securities or assets, or some combination of these investments (U.S. Securities and Exchange Commission, 2008). Mutual funds are in turn operated by professional money managers, the fund managers, who invest the
98% to 43.72%. The average fund in this category has a mean total return of -0.64% and a standard deviation of 12.23 USAA Precious Metals and Minerals (USAGX), 2009). Another factor that one should look at when contemplating investing in a mutual fund is how much the fund has rewarded shareholders relative to the risk they have taken. One should look at a risk-adjusted measure of performance known as the Sharpe ratio. It
b) It is required that the "summary prospectus appear at the front of a fund's prospectus." (Security Exchange Commission (b)) c) Amendments have been made so that the Internet can be used to give important 'information' inclusive of "description of the fund's investment objectives and strategies, fees, risks, and performance." (Security Exchange Commission (b)) d) The Form N-1A, for mutual funds, should have the "key information at the front of its statutory
The first aspect of successful mutual fund performance is to define a benchmark. Most funds have specific benchmarks that they use both internally and externally. Externally, the benchmarks are often used in promotional material, relating the performance of the fund to the performance of the Dow Jones Industrial Index or some other broad-based market indicator. Funds operating in specific sectors will benchmark against a sector index. The idea behind
The correlation was expected to be relatively weak because even high value funds can experience exceptional performance. The weakest correlation (0.056), which is not a significant correlation at all, is with the Morningstar rating. This is somewhat surprising, because the Morningstar rating presumably takes the fund's historical returns into consideration. However, in any given year the fund may or may not perform according to its track record. This could result
When looking at risk, the fund does have a beta higher than that of its large cap blended peers. The beta of the fund is roughly 1.23 as compared with a beta of 1.04 for many of its peers. This can be attributed to the large concentration in financial stocks which tend to have high betas relative to the market. This is to be expected as financial shares raise disproportionately