[Among bond funds, portfolios heavy on high yield did an about-face, with the average fund in this group up 5.4 percent in the quarter.] Last year people got panicky about corporate debt because of Enron and WorldCom, ... The spread (between government and corporate bonds) got too big and the market reversed. |
[Because these portfolios are so large, they have to spread their dollars across many different companies. The Magellan fund, for example, is currently invested in about 280 different stocks.] The big funds are very well managed and very well diversified, ... They might fall as hard as the S&P, but there aren't a lot of big disasters there. |
[Lange's style -- which includes more foreign and smaller companies -- has resulted in a portfolio that doesn't track the S&P so closely, and his beta was 1.23.] No one would accuse Lange as a closet indexer, ... He's done an awesome job at Capital Appreciation. |
A key challenge for investors is picking funds whose asset bases haven't become too fat to be handled effectively. |
A tax-managed fund is simply a fund who's goal it is to maximize after-tax returns, whereas most funds are focused on pretax returns, ... I think the one thing that probably all of them have is the idea of selling losers to offset gains. If you've just realized profits on one stock you'll sell a few dogs. |
And not just to look at those two options either, ... If they can't get good management at modest cost, then liquidation is a good option too. |
Anytime you can get a fund with a sound strategy, small assets and low costs, good things are likely to happen. |
Despite those amazing returns, by and large all those funds really did was lose money for a lot of people. One of the main points of owning a mutual fund is to be able to access high-quality professional management. But you are throwing that away when you buy funds like these with some manager who just happened to get lucky. |
Expenses are definitely trending down. As a result of the whole scandal, boards are taking their responsibility more seriously, subjecting fees to more scrutiny. |
Fidelity bases its IPO allocation policy entirely on asset size and that's the way it should be, |
Fidelity bases its IPO allocation policy entirely on asset size and that's the way it should be. |
Generally you go with a manager who has a meaningful track record somewhere. It doesn't guarantee this is a smart or good manager, but at least it said I've got a few years and I can learn a lot from that. |
Generally, what you'll find is a pretty normal distribution (among socially responsible mutual funds). As far as I can tell, those screens don't have an impact positively or negatively on performance. |
He certainly deserves points for doing so well despite the growing assets. |
He's a very sharp guy who did a really good job at Mutual Series. They got points for not giving up on their strategy during the growth boom and tossing aside dividends and balance sheet analysis. |