Category Archives: Mutual Funds

Tips for Choosing High Yield Mutual Funds

If you are considering investing some cash in mutual funds, it makes sense that you’d want to invest in the best ones you can find. So called high yield funds are the best ones to look for, since they provide you with the opportunity to enjoy the highest possible yield you can.

So with that in mind, here are some tips on choosing the best high yield mutual funds on the market today.

Do your homework

It should go without saying, but it is surprising how many people are so eager to invest in these funds they’ll slap their money down on anything that looks good. They do this without researching it properly first, so it makes sense to ensure you don’t fall into this group.

Start looking online to see how many mutual funds are out there that fall into this type. Of course you shouldn’t just trust everything you read. Everyone is keen to stress the positives without focusing too much on the negatives. This means it’s your job to do both.

There are plenty of well known and reliable websites that are long established online that can be relied upon to give out good information. If you search for the phrase ‘high yield mutual funds’ you will find lots of these sites popping up on the first page of Google. Use these results to help you find the companies you need to look at more closely.

Choose a fund that fits in with your investment plans

It goes without saying that most mutual funds will perform better over the long term as opposed to the shorter term. But there can be a difference between investing for five years and fifteen years. Think about the goal you have in mind and how long you want to save for, and consider which funds most closely match your ideal.

You may find some perform better over the period of time you want to save for, in which case you should add these to your shortlist. Now it is time to delve into each individual fund more closely. Find out everything you can about each one – get the literature and speak to those managing the funds if you can.

You should also bear in mind that while looking at the most successful mutual funds for this year will help in some ways, it doesn’t necessarily mean those same funds will perform just as well next year. Be sure to look back over a longer period, say five years or more, to get a more accurate pattern.

As you can see, it is wise to focus on the details of all the high yield mutual funds you have come across that you are thinking about sinking money into. Choose the one that appeals to you the most. While you cannot get rid of the risks inherent in investing in this type of fund, you can vastly reduce them and hopefully get the highest yields in the process.

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What are the Best Oil Mutual Funds?

Some people who want to invest in mutual funds are quite happy to invest in balanced funds that take in all manner of different companies. But others want to invest in specific funds with a theme, such as oil mutual funds for example. Oil mutual funds tend to be quite popular because their returns are generally rather good when compared to other funds.

If you are interested in this particular area, it is wise to do a spot of research to see what kinds of oil funds are out there to invest in. Obviously there are many of them and while we have provided a list of some of them below, this should not be treated as an exhaustive list. Indeed you should make your own decisions and look into each one carefully before investing. The same applies for looking at other oil mutual funds in case you prefer those you find elsewhere.

Vanguard Energy

If you want an average return of around 14% or more each year, this could be the ideal place to look. This is one oil fund that has weathered the storm of the recession rather well, even when other funds were struggling. This alone could give you serious reason to consider Vanguard.

Fidelity Select Energy Services

The idea with this fund is to get capital growth. If this is on the cards for you, explore it in more detail. It is a typical example of how an oil mutual fund has gone from strength to strength thanks to the increasing prices given to oil.

Invesco Energy

This is another oil mutual fund that has been progressing well. It didn’t do as well in 2011 as it has this year, but having said that it still outperformed many basic savings accounts, so you have to consider what to expect. It could be a good possibility for the year ahead.

ProFunds UltraSector Oil and Gas Investor

It may have a long title but the name of the game is to achieve a steady growth over time. And this particular mutual fund has managed to do just that, providing more than 9% in returns over the past decade.

Are you going to pick one or more mutual funds to invest in?

Of course the main idea is to spread your risk as much as possible. Thus you may wish to invest in more than one oil mutual fund if this is the area that concerns you. Consider how much you have to invest and what you expect to gain from that investment. This should help you work out whether you want to invest in more than one mutual fund and whether you want all of them to be involved in the oil industry.

Clearly many people pick oil mutual funds simply because they have the potential to deliver a reasonably reliable improvement each year. But regardless of your reasons to invest in them, the suggestions above should help you choose your ideal fund.

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Low Minimum Mutual Funds to Consider Investing In

Are you looking to invest in some mutual funds for the future? Many people are, and yet the toughest problem of all is finding ones that are affordable. Even a cursory look will reveal plenty of mutual funds that require $1,000 and up to invest in.

If you need a much lower minimum fund to consider, perhaps these will be of use to you. Remember though that it is a good idea to look into all these funds in more detail before considering whether you should invest in them or not. Remember too that it’s not just a question of whether you are able to afford to invest in a particular fund – it’s a question of whether the fund is set out as you would like it to be.

American Funds American Mutual Fund Class A

This is a mutual fund with a very affordable $250 as the minimum investment you need to get through the door. It has performed well over the past year and is a large cap investment fund, so it might be worth a closer look if you want a super low investment amount to work with.

American Funds AMCAP Fund Class A

Here we have another fund that only requires a $250 minimum to get in. In common with the above fund it has done well during the last year, so it could be a good one to consider. This is a growth fund, whereas the one mentioned above is a value fund.

FAM Value Inv (Fenimore Asset Management)

Do you want the maximum number of $500 options to consider? Here is another one to add to your list. It is a blended fund and has risen by more than 12% in the past year.

American Funds EuroPacific Class A

If you feel that even $500 is a little too much to stretch to at the moment, you will be pleased to know you can invest in mutual funds for even less than this. How about trying $250 for example? In this case the fund has performed exceptionally well once again over the space of the last year, giving you more to think about if you want to keep your initial investment as low as possible.

American Funds New World Class A

One final suggestion for you here – and it also requires a minimum of just $250 to get started. As the name would suggest it points to a selection of new markets to invest in, and has performed well over the past year. Remember though that the long term is the idea for this fund, rather than a quick investment for quick profits.

So there you have it – a few suggestions worth exploring in more detail if you only want to sink a few hundred dollars into your first mutual fund. The more you learn and the more you know, the easier it will be to figure out which mutual fund will be the best one for you.

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Expenses Involved with Mutual Funds

If you are considering getting involved with mutual funds you should be aware there will be expenses involved as well. Indeed if you aren’t careful you can end up with a mutual fund that doesn’t perform anywhere near as well as you thought it would – and it can all be down to excess expenses.

So let’s take a closer look at the expenses you should look out for.

Yearly fees on mutual funds

Each year you are part of a particular mutual fund you will pay a fee to stay in it. This fee can vary between separate funds so when you are looking for a suitable investment to make in the beginning, ensure you look at these fees and choose a high performing fund that keeps the yearly fees at a respectable low.

Loads for buying or selling the shares you hold in a fund

When you are searching for mutual funds to invest in, you will probably notice some of them are referred to as no load funds. In this sense a load refers to a charge levied on the fund, or more properly to shares held within a fund. A load is basically a transaction charge and it is well worth looking out for.

Since some mutual funds exist without these charges, it makes sense to ensure you choose a mutual fund that doesn’t add them on. It can save you a lot of money in both the short and the long term. The no load funds come directly from the fund company itself, whereas those offered with a load attached will generally be offered through a broker.

Look at the expense ratio

While some fees are applied directly to a mutual fund, such as those indicated above, others are not as easy to spot. Perhaps the best example of this is the expense ratio that is applied to every mutual fund around today.

The expense ratio will be expressed as a percentage. It is the amount of money that is deducted from the mutual fund’s earnings on an annual basis to make sure all operating expenses are paid for. There will be quite genuine operating expenses involved, such as the salaries of those who run the fund and administrative expenses as well. But of course the expense ratio can be much higher with some companies than it is with others, so watch out for this and compare one to another so you know what to expect.

Looking out for the items above should ensure you have a better chance of finding a good quality fund that pays out a healthy amount to its investors each year, without taking back huge amounts for itself.

It should also ensure you can narrow down the possibilities more quickly, so you can find a more suitable mutual fund for your requirements. Expenses can certainly climb considerably if you pick the wrong fund. However, pick the right one and you will benefit for a long time to come.

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How to Find Top Performing Mutual Funds

If you want to invest in mutual funds, it makes sense that you’d want to invest in the ones that bring in the best performance. But how do you find them?

Fortunately you don’t have to resort to closing your eyes and sticking a pin in a list you have in front of you. There are ways you can make the job easier. Here are some suggestions.

Check out the fund manager

This is the most important aspect of all. If you only pick one thing to do, make it this. It is better to choose a good fund manager with a company you’ve never heard of than to choose a fund manager with no track record who works with a company that is a household name. In short, go with the fund manager and not the company.

Find the benchmark for the funds you are interested in

You need a benchmark in order to gauge how well – or badly – a particular fund is doing. The benchmark can vary depending on the specific funds you are looking at. For instance, if you want to invest in a stock mutual fund you would look closely at the S&P 500 Index.

Look for consistent returns

This is a good way to find funds that perform well over a longer period of time. This points to funds that can be relied upon to do well even when times are not as good as they might be. Of course you will have periods when any fund will do better or worse than it may do at other times. But you want to pick something that is more consistent than its counterparts. You want to avoid the funds that have a tendency to dip further than others do, in order to make the most of your investments.

Look for no load funds

This is another important aspect to consider. A ‘load’ is basically another word for a charge made for entering into a mutual fund. Hence where there is no load, there is no fee. This is good news for you because it means you will pay less over the long term. This automatically means you get a better performing mutual fund, simply because you will pay less than you would otherwise. Just imagine the difference when compared to a fund that requires you to pay fees and charges every year.

As you can see there are a number of ways to help you find top performing mutual funds. While the fund manager is the most important element of all, adding in the other elements certainly helps to narrow down the possibilities. This will leave you with only the best mutual funds to consider.

One final point – don’t assume you will find the top performing funds in a matter of minutes. This process can take some time to go through if you want to do it properly. Spending a little more time now will mean better profits later on.

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Tips for Building a Solid Mutual Fund

If you’re thinking about building a mutual fund, it is well worth finding out as much as you can about it before you get started. One thing you should know is there are lots of options out there for building a mutual fund. You can choose different advisers or figure it all out on your own. You can use a systematic approach or simply ‘go with your gut’. Of course we wouldn’t recommend the second option, but one thing is for sure – you need a lot of knowledge to make an informed decision on what to buy and when.

Find a reputable fund manager with a good track record

Sure, you can figure it all out on your own. But there is a reason why some fund managers have had great success in this field – they know what they’re doing. Finding the best funds to get the best returns is a full time job, so instead of trying to figure it out in your spare time, rely on a full timer instead.

Look for an index fund

This is one of the most basic options available to you. However, don’t assume basic means uninteresting or unable to bring you rewards. The opposite is true. The index fund may not make as much for the adviser, but it stands to balance out the amount of risk for you. This means you’ll be able to stay safer and still stand a chance of getting a good return on your investment.

Watch out for the associated fees you’ll pay

Mutual funds mean fees – there are no two ways about it. But this doesn’t mean you have to settle for paying large fees on your funds. In fact if you do your research you can watch out for funds that have much lower fees overall than others. Crunch some numbers and compare funds and see which ones offer the best deal so you pay as little as possible.

Think about other investment types as well

Mutual funds are popular among Americans, and they’ve gotten more so over the years too. But while they are popular for good reason, they’re not the only type of investment out there. No matter how much or little risk you like to take with your investments, you should definitely consider balancing your mutual funds with one or two other types of investments as well. This will ensure any risk is balanced out – a good option since mutual funds don’t carry any kind of guarantee.

But perhaps the biggest and best tip is to know what you’re going into if you intend to build a mutual fund. Don’t just invest in one because you know a lot of other people who have done the same thing. Just because they’re good for others it doesn’t mean they’ll be good for you. They could be excellent, but only you can decide which ones to get and why – and how much you should invest in them as well.

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What Kind of Average Returns Can You Expect on Mutual Funds?

If you’re thinking about investing in mutual funds it makes sense you’d want to look into the potential returns you could expect first. Diving in with no knowledge of what to expect is a great route to disaster.

So what can you expect? Here are some points to remember.

Remember the word ‘average’ means just that

You must understand this. An average mutual fund return is gauged over a period of time. This means one year might bring a return of 10% (this is over the entire mutual fund market, rather than one in particular). It also means another year might bring an average return of just 2% or even less. It all depends on the market conditions and how well or badly the stock market is doing.

The word ‘average’ covers the entire market. So while one mutual fund might be doing really well and achieving, say, 20% compared to that 10% average example above, another mutual fund might only clear 5%.

So do average returns really mean anything at all?

They do – but you have to know in what context they are applied to. You could be looking at the market as a whole or the mutual funds created by a particular company, like Standard and Poor for example. The trick is always to set your boundaries before you start looking into averages. They are only useful up to a certain point.

What factors can affect the average returns achievable?

This is a good question to ask. Clearly a company that is good at managing its mutual funds will produce a better than average return than a company that isn’t historically as good at managing theirs. This is despite the fact they are both trading in exactly the same marketplace at exactly the same period in time.

Another factor to consider is the fees you will be charged annually to be part of a particular fund. There could be two funds with the same average return when compared to the market as a whole, but if one company has higher fees than the other, the lower fee mutual fund will perform better overall.

Does it help to gauge average returns?

Providing you know what you are looking for and you ensure two or more funds are compared on a level playing field, averages can indeed be useful. You obviously want to earn as good a return as you can from your chosen fund. A spot of research can go a long way towards helping you do this.

The more specific you can be the better. History can only show you how the market has performed over a specific period of time. Don’t just look at the past year or two for a particular fund – go back further to get a better average.

Holding mutual funds for a longer period of time is the best way to ensure you can get the best average return available, no matter which fund you invest in.

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What are Fidelity Mutual Funds?

Most Americans are familiar with the name Fidelity. It is the name of a private corporation offering a range of financial services. More than sixty years old, the corporation is known for providing North Americans with a huge range of products of all kinds, particularly mutual funds.

Fidelity mutual funds are investments offered specifically by this corporation. Since Fidelity is one of the biggest organizations of its kind in the world, it should not come as a surprise to learn it offers a wide selection of mutual funds. Indeed there are several hundred of them: each designed to appeal to a particular type of investor.

How can you find out more about Fidelity mutual funds?

The best place to go is their website. They have a dedicated section on mutual funds that provides you with all the information you will need. This includes funds that have four and five stars, as well as news and analysis on all the latest developments in their funds market.

The best word of advice to give here is to take your time exploring the website and finding out more about Fidelity as well. This will provide you with a good background to the corporation so you are able to find out as much as you can in advance of investing any money in a mutual fund.

How can you choose the best fund for your own needs from Fidelity?

Once you are on the main page for the mutual fund section of their website, you’ll see a link for Fidelity mutual funds. When you click on this the section will expand to provide you with several options. One of these is to browse their funds, and you can do this in a number of different ways.

For example you can look through the range of funds that are available. These include stock funds, bond funds, international funds and money market funds. You’ll find the majority – nearly half – are tied up with the stock market, while a quarter are bond funds.

You can also use a sliding scale that lets you gauge the balance you want to achieve, i.e. conservative growth or aggressive growth, plus other options in between. Alternatively simply search the portfolio from Fidelity by name. This is ideal if you have heard of a particular fund and you want to find it more quickly.

Is Fidelity the best place to go to when searching for a mutual fund to invest in?

There are other mutual fund providers you could go to, of course. Furthermore it is always advisable to research the market so you can find the best possible range of mutual funds on the market today.

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What Kinds of Mutual Funds Can You Get?

Many people have heard of mutual funds. But even though they are often talked about as if they are all alike, nothing could be further from the truth. Mutual funds can be classified in all kinds of different ways, although there are several main kinds that can be noted to exist if you are a beginner. Here we will go through these types so you can delve into each of them in more detail.

Stock funds

If you are considering getting involved with stock funds you must remember they are better focused on for the long term. It would be unwise to assume you could get a good return over the course of a few months. We are all aware of stock market crashes that have occurred in the past. However, even with these crashes in mind, the overall trend for the value of stocks has still been on the rise.

One other point to remember is that this category of mutual funds is generally best if you are happy to take on a little more risk in the hope of gaining a bigger reward.

Bond funds

Those who feel more secure knowing they have a more reliable source of income will likely feel more confident investing in bond funds. Of course they come with risks, much like any other mutual fund, but they are greatly reduced when compared to the other types. One of the key risks is a potential rise in interest rates. This has the effect of reducing the value of the bonds, thus making them less successful.

Balanced funds

As the name would suggest, these are normally a balanced mix of both stocks and bonds. This might be suitable for you if you want to invest in both types but you want to keep them together in one mutual fund. Obviously it makes sense to identify exactly which types of stocks and bonds go to make up any specific mutual fund before you invest. And remember, there will be a degree of risk involved so bear this in mind as well.

Money market funds

This type of mutual fund traditionally carries a far lower risk of loss than the kinds of funds mentioned above. However this is tempered by the fact that the returns are usually lower than the others as well. It is the classic case of less risk, less reward. The other kinds of mutual funds offer a higher degree of risk, but if that risk pays off you can expect a higher return as well.

Understanding the differences – and choosing the best mutual funds for you

Everyone will have their own ideas as to which type of mutual fund will be best for their financial needs. Risk appetite, expectations and finances will all play a part, but it is wise to understand what options there are and which type of mutual fund will be the best choice. Once you know the options you can make an informed choice.

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10 Tips to Succeed With Mutual Funds

Investing in a mutual fund is one of the easiest things you can do if you want to get more involved in the financial markets. They enable you to invest in a range of ways that wouldn’t be possible any other way.

Here are some tips to ensure you reap the rewards from your own mutual fund investments.

  1. Are the returns consistently good?

This is very important to find out. Some mutual funds do not perform as well as others. Always look into past history to see whether there is a good or bad pattern there to consider.

  1. What are the fund managers like?

If they are not well known or do not have a good track record, steer clear and find some who do. If you cannot research their history, ask why.

  1. Stick with no load funds.

These will provide you with more in the way of profits and you’ll pay fewer charges too. There are other options but this is the best one.

  1. Learn more about the stock market.

Don’t dive in without finding out more about how the stock market works first. The more knowledge you have, the easier it is to pick a good fund.

  1. Know whether you want to opt for passive or active funds.

Passive funds tend to be safer than active ones, so you should think about whether you want to strive for a potentially bigger return, or whether you’re happier being safe.

  1. Know which strategy the fund managers will adopt.

Find out how they decide how to manage the mutual fund. This could have a large bearing on whether or not you want to join that particular fund.

  1. Buy into an established fund.

Never opt to get involved in a mutual fund that has only just got started. Look for an established one instead – it will have a history that may help to predict its future.

  1. Consider what else you are investing in.

What other financial vehicles have you invested in, or want to invest in soon? Will a mutual fund fit into your overall plan?

  1. Think about your appetite for risk.

Some people naturally gravitate towards risk, while others shy away from it at every opportunity. How much risk would you be happy with? Choose a fund which appeals to your sense of risk.

  1.  Think about growth or value funds.

Different mutual funds offer different things. For instance value funds can offer a better outcome than growth funds, which are more likely to backfire and lose money. Nothing is certain of course, but you should know the difference between the two.

So you see there are lots of things to consider if you are thinking about investing in mutual funds. The more you know and understand in advance, the easier it is to ensure you are going to invest in the right mutual fund for your needs and goals. Go back through those ten steps again to see how they assist you.

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10 Tips to Succeed With Mutual Funds

Mutual funds are great long-term investments, but if you blindly pick one without researching what’s out there and carefully weighing your options, then you are setting yourself up for disappointment – and massive losses – down the road. You should keep a few things in mind to succeed with mutual funds, and following these 10 simple tips can help you pick a winner.

1.       Stick with no-load funds.

Many mutual funds come with fees that are levied any time a fund manager buys or sells a stock. If you opt for a no-load fund, you can sidestep these fees and put more money back in your pocket in the form of returns.

2.       Make sure there’s a low turnover rate.

Mutual funds incur fees whenever stocks are bought and sold. Lower turnover equals lower fees and lower capital gains taxes, too.

3.       Look for consistent returns.

You need to make sure the returns investments in the fund are receiving are consistent. We’re not talking sky-high returns – the key here is stability for the long haul.

4.       Keep cash reserves low.

If a mutual fund has a high cash reserve, then this means that your investment will suffer as a result. Cash is generally held back to pay for new investments and to pay off any investors that decide to jump ship and cash out their funds, which cuts into you profit potential. Opt instead for a mutual fund with a low cash reserve.

5.       Be aware of your tax burden.

According to the SEC, you are liable for paying capital gains taxes on a mutual fund. Funds are required to pay investors any stocks they sell for a profit as long as those stocks can’t be offset by a loss. You will be responsible for paying taxes on any distributions you receive from the fund – even if the fund itself is operating in the red.

6.       Don’t buy a new fund.

It’s important to purchase a mutual fund that had been around for a while. The long-term performance of brand new funds has not yet been established, so they’re more vulnerable to negative earnings.

7.       Buy a fund with lots of assets.

More assets equals greater security, plain and simple. The key to stability is diversification.

8.       Keep the turnover rate in mind.

A higher turnover of securities in a mutual fund will incur higher fees and taxes.

9.       See what services are available to you.

Many funds offer services to their investors, such as help lines, live chat, check-writing privileges, and other perks. Find out what’s available to you that can help you easily manage your account before you buy.

10.   Keep your overall portfolio in mind.

Before you invest in mutual funds, you should make sure they fit in with your overall investment strategy. If it doesn’t make financial sense to invest in a fund instead of another financial instrument, don’t do it. Talk to someone who specializes in security analysis and portfolio management.

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The Average Returns to Expect on Mutual Funds

When you are deciding on a vehicle for investing your money, mutual funds may come up in conversation more often than not. Because the risk is spread out, the investment is perceived as safer than gambling on individual stocks. It’s also much more lucrative than squirreling away your hard-earned dollars in a low-interest-bearing savings account. If you use mutual funds as a long-term investment strategy, you can earn returns of up to 12%. However, it’s important to choose the right fund and watch it closely, because if you invest in a loser, you may wind up earning far less in interest.

Consistent Investment Strategy

The single best way to construct a safe, diversified investment portfolio is to make sure you pick a mutual fund with a manager that invests in the same things consistently. You also need to check on the manager’s investing track record. If your fund is designed for investment in particular classes of stocks, then you need to follow up to ensure that the manager is indeed sticking to the plan. If he doesn’t, then random picks and sporadic buying could jeopardize your long-term returns.

Pick a Winner

Sometimes the market as a whole is bad. Other times, the sector that your mutual fund owns stocks in may be having an off year. Neither case merits jumping ship. It’s better to weather economic dips and spikes such as these in favor of looking out for your long-term gains with a fund. On the other hand, if you have a mutual fund that lags behind similar funds substantially for more than one year, then you may have a problem. Keep a close eye on the fund, and be prepared to walk away if you think you may have a loser on your hands.

Watch the Management

Be aware of the fund manager’s activities at all times. Read your annual statements and check on the performance and the manger’s purchases occasionally. If management changes on you, then it may be time to keep a closer watch. You need to ensure that the new fund manager closely matches the old in investment choices if you fund has been doing well, otherwise you may be in store for a bumpy ride. Conversely, if your fund was tanking and management changes hands, give the new guy a shot before you decide to sell off.

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