Tag Archives: datetime-local

5 Top-Ranked Short-Term Government Bond Mutual Funds To Buy

Mutual funds investing in debt securities are among the most secure investment options, which provide regular income while protecting the capital invested. Funds, which are part of this category, bring a great deal of stability to portfolios with a large proportion of equity, while providing dividends more frequently than individual bonds. U.S. government bond funds usually invest in Treasury bills, notes and securities issued by government agencies. They are considered to be the safest in the bond fund category and are ideal options for the risk-averse investor. Meanwhile, a short-term government bond fund is a mutual fund that’s limited, by its investment objectives and fund bylaws, to investing primarily in short-term obligations of the federal government or its agencies. Depending on the fund’s definition, short term can be up to five years. Below, we will share with you 5 top rated short-term government bond mutual funds. Each has earned a Zacks Mutual Fund #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. American Funds Short-Term Tax-Exempt Bond A (MUTF: ASTEX ) seeks tax exempted current income. ASTEX invests a large portion of its assets in securities that are exempt from regular federal income tax. ASTEX invests not more than 20% of its assets in securities that are subject to federal alternative minimum tax. ASTEX mostly invests in municipal bonds having a rating of AA- or better. ASTEX’s combined portfolio has a dollar-weighted average maturity of not more than three years. The American Funds Short-Term Tax-Exempt Bond A fund has a three-year annualized return of 0.7%. ASTEX has an expense ratio of 0.58% compared to a category average of 0.71%. AMG Managers Short Duration Government Fund (MUTF: MGSDX ) invests the majority of its assets in debt securities issued by the U.S. government or derivatives that have economic traits similar to such securities. MGSDX aims to reduce credit risk by investing in securities of the highest credit quality. The AMG Managers Short Duration Government fund has a three-year annualized return of 0.2%. As of December 2015, MGSDX held 424 issues, with 4.96% of its total assets invested in Fed Natl Mort Assc 3%. Lord Abbett Short Duration Income Fund A (MUTF: LALDX ) seeks appreciably high level of income and preservation of capital. LALDX invests a minimum of 65% of its assets in investment grade debt securities. These may include corporate debt securities of U.S. issuers and non-U.S. issuers denominated in U.S. dollars, mortgage-backed securities, U.S. government securities and inflation-related investments. The Lord Abbett Short Duration Income A fund has a three-year annualized return of 1.1%. LALDX has an expense ratio of 0.59% as compared to a category average of 0.80%. PNC Ultra Short Bond I (MUTF: PNCIX ) invests in investment-grade securities including U.S. government securities, corporate bonds, asset-backed securities and mortgage-backed securities. PNCIX has a dollar-weighted average maturity of not more than 18 months, but may vary outside that range from time to time. The PNC Ultra Short Bond I fund has a three-year annualized return of 0.2%. As of December 2015, PNCIX held 87 issues, with 5.98% of its total assets invested in US Treasury Note 0.75% SEI Daily Income Trust Short-Duration Government Fund (MUTF: TCSGX ) seeks current income. TCSGX generally invests all of its assets in obligations of the US Treasury and obligations that are approved by the US government or by its agencies. These securities include mortgage-backed securities, and repurchase agreements. TCSGX may consider securities of agencies including the Federal National Mortgage Association (Fannie Mae ( OTCQB:FNMA )) and the Federal Home Loan Mortgage Corporation that are affiliated by the US government. The SEI Daily Income Trust Short-Duration Government A fund has a three-year annualized return of 0.4%. TCSGX has an expense ratio of 0.48% as compared to a category average of 0.80%. Original Post

Best And Worst Q1’16: Energy ETFs, Mutual Funds And Key Holdings

The Energy sector ranks ninth out of the ten sectors as detailed in our Q1’16 Sector Ratings for ETFs and Mutual Funds report. Last quarter , the Energy sector ranked last. It gets our Dangerous rating, which is based on aggregation of ratings of 23 ETFs and 112 mutual funds in the Energy sector. See a recap of our Q4’15 Sector Ratings here . Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the sector. Not all Energy sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 25 to 153). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the Energy sector should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2. Figure 1: ETFs with the Best & Worst Ratings – Top 5 Click to enlarge * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The Van Eck Market Vectors Uranium+Nuclear Energy ETF (NYSEARCA: NLR ), the PowerShares Dynamic Oil & Gas Services Portfolio (NYSEARCA: PXJ ), and the Van Eck Market Vectors Unconventional Oil & Gas ETF (NYSEARCA: FRAK ) are excluded from Figure 1 because their total net assets are below $100 million and do not meet our liquidity minimums. Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5 Click to enlarge * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The Van Eck Market Vectors Oil Services ETF (NYSEARCA: OIH ) is the top-rated Energy ETF and the Fidelity Select Energy Service Portfolio (MUTF: FSESX ) is the top-rated Energy mutual fund. OIH earns an Attractive rating and FSESX earns a Neutral rating. The First Trust ISE Water Index Fund (NYSEARCA: FIW ) is the worst-rated Energy ETF and the Saratoga Advantage Energy and Basic Materials Portfolio (MUTF: SBMBX ) is the worst-rated Energy mutual fund. FIW earns a Dangerous rating and SBMBX earns a Very Dangerous rating. 184 stocks of the 3000+ we cover are classified as Energy stocks. The FMC Technologies (NYSE: FTI ) is one of our favorite stocks held by OIH and earns an Attractive rating. While the Energy market has certainly had its issues over the past two years, FMC Technologies business has continued to exhibit strength. Over the past five years, FMC has grown after-tax profit ( NOPAT ) by 9% compounded annually. The company currently earns a return on invested capital ( ROIC ) of 12%. Best of all, FMC has earned positive economic earnings every year since 2006. Despite the above, FTI declined over 37% in 2015. Now, at its current price of $25/share, FTI has a price to economic book value ( PEBV ) ratio of 0.8. This ratio means that the market expects FMC’s NOPAT to permanently decline by 20% over its remaining corporate life. If FMC can grow NOPAT by just 2% compounded annually for the next decade , the stock is worth $31/share today – a 24% upside. The Diamondback Energy (NASDAQ: FANG ) is one of our least favorite stocks held by SBMBX and earns a Dangerous rating. Despite reporting impressive revenue growth, Diamondback Energy’s business is in decline. The company’s economic earnings have declined from -$32 million in 2012 to -$331 million over the trailing twelve months. Diamondback’s ROIC has fallen from 3% to -2% over the same timeframe. Despite the deterioration of the business, FANG was up 12% in 2015, which has left shares highly overvalued. To justify its current price of $58/share, Diamondback must grow NOPAT by 12% compounded annually for the next 18 years . When contrasted with Diamondback’s short history of value destruction, this expectation appears overly optimistic. Figures 3 and 4 show the rating landscape of all Energy ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst ETFs Click to enlarge Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Mutual Funds Click to enlarge Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, sector or theme.

Best And Worst Q1’16: Consumer Staples ETFs, Mutual Funds And Key Holdings

The Consumer Staples sector ranks first out of the ten sectors as detailed in our Q1’16 Sector Ratings for ETFs and Mutual Funds report. Last quarter , the Consumer Staples sector ranked first as well. It gets our Attractive rating, which is based on an aggregation of ratings of 9 ETFs and 15 mutual funds in the Consumer Staples sector. See a recap of our Q4’15 Sector Ratings here . Figure 1 ranks from best to worst all nine Consumer Staples ETFs and Figure 2 shows the five best and worst-rated Consumer Staples mutual funds. Not all Consumer Staples sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 17 to 116). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the Consumer Staples sector should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2. It is rare that one of the worst ETFs in this sector hold enough quality stocks to earn an Attractive-or-better rating. Figure 1: ETFs with the Best & Worst Ratings – Top 5 Click to enlarge * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5 Click to enlarge * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The Fidelity Select Automotive Portfolio (MUTF: FSAVX ) is excluded from Figure 2 because its total net assets (TNA) are below $100 million and do not meet our liquidity minimums. The Vanguard Consumer Staples Index Fund ETF (NYSEARCA: VDC ) is the top-rated Consumer Staples ETF and the Vanguard Consumer Staples Index Fund (MUTF: VCSAX ) is the top-rated Consumer Staples mutual fund. VDC earns a Very Attractive rating and VCSAX earns an Attractive rating. The PowerShares DWA Consumer Staples Momentum Portfolio (NYSEARCA: PSL ) is the worst-rated Consumer Staples ETF and the ICON Consumer Staples Fund (MUTF: ICRAX ) is the worst-rated Consumer Staples mutual fund. PSL earns a Neutral rating and ICRAX earns a Very Dangerous rating. 121 stocks of the 3000+ we cover are classified as Consumer Staples stocks. Wal-Mart Stores (NYSE: WMT ) continues to be one of our favorite stocks held by VDC and earns an Attractive rating. Since 1998, Wal-Mart has been uniquely consistent in growing after-tax profit ( NOPAT ) by 9% compounded annually and earning a double-digit return on invested capital ( ROIC ), which is currently 11%. Additionally, Wal-Mart has generated over $57 billion, cumulatively, in free cash flow over the past five years. Overblown concerns about Wal-Mart’s business model pushed the stock down over 25% last year, which has made shares greatly undervalued. At its current price of $64/share, WMT has a price to economic book value ( PEBV ) ratio of 0.8. This ratio means that the market expects Wal-Mart’s NOPAT to permanently decline by 20%. However, if Wal-Mart can grow NOPAT by just 2% compounded annually over the next decade , the stock is worth $98/share today – a 53% upside. The J.M. Smucker Company (NYSE: SJM ) is one of our least favorite stocks held by ICRAX and earns a Dangerous rating. Over the past five years, J.M Smucker’s NOPAT has declined by 2% compounded annually while its ROIC has fallen from 8% to 5%. Despite the deterioration of the business, SJM is up over 20% in the past two years, which has left shares significantly overvalued. To justify its current price of $122/share, SJM must grow NOPAT by 13% compounded annually for the next 12 years . This expectation seems awfully optimistic given SJM’s inability to grow NOPAT at all in the past five years. Figures 3 and 4 show the rating landscape of all Consumer Staples ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst ETFs Click to enlarge Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Mutual Funds Click to enlarge Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, sector or theme.