Tag Archives: mutual funds

3 Best-Ranked BlackRock Mutual Funds To Boost Your Portfolio

BlackRock Inc. is the world’s largest asset management corporation with over $238 billion worth of assets under management (excluding money market assets). It caters to institutional, intermediary and individual investors through a wide range of products and services. It offers a range of risk management, strategic advisor and enterprise investment system services. BlackRock’s offerings range from individual and institutional separate accounts to mutual funds and other pooled investment options. In order to strike a balance between risk and opportunities, BlackRock aims to provide a wide range of investment solutions to its clients. Below, we share with you three top-rated BlackRock funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. BlackRock Small Cap Growth Equity Portfolio A (MUTF: CSGEX ) invests a major portion of its assets in equity securities of small capitalization domestic companies. According to CSGEX’s advisors, companies with a market cap similar to those included in the Russell 2000 Index are considered small-cap firms. CSGEX may also participate in IPO markets. The fund has a three-year annualized return of 4.7%. Travis Cooke is the fund manager of CSGEX since 2013. BlackRock California Municipal Opportunities Fund A (MUTF: MECMX ) seeks income exempt from Federal and California income taxes. MECMX invests a large portion of its assets in California municipal bonds. The fund invests a least half of its assets in investment-grade securities. MECMX may also invest a maximum of half of its assets in non-investment-grade bonds. The fund has a three-year annualized return of 3.6%. As of January 2016, MECMX held 147 issues with 2.69% of its assets invested in California St For Previous Iss Go Ref 5%. BlackRock GNMA Portfolio A (MUTF: BGPAX ) invests the majority of its assets in Government National Mortgage Association (“GNMA”) securities. BGPAX purchases securities that are rated in the highest rating category (AAA or Aaa) during the time of purchase by at least one major rating agency. The fund has a three-year annualized return of 1.7%. BGPAX has an expense ratio of 0.91% as compared to the category average of 0.93%. Original post

3 Mid-Cap Value Fund Picks As Equity Funds Notch First Inflow

U.S.-based equity funds witnessed inflows for the first time this year, pointing to investors’ confidence in that category. Not only these funds, but the other broader categories also managed to attract significant volumes of investment for the week ending Mar. 9, according to Lipper. A strong recovery in the equity markets over the past one month was one of the major catalysts to the rebound. Under the U.S. equity fund category, mid-cap value mutual funds emerged as the top performers over the past one-month period, according to Morningstar. These mutual funds are known for their impressive returns at a lesser risk by virtue of exposure to stocks that are available at a discounted price. Perhaps this characteristic feature of mid-cap value mutual funds attracted investors to allocate their assets in them. Given this impressive scenario for mid-cap value mutual funds, we have highlighted those that are fundamentally strong and outperformed in recent times. Also, these have the potential to continue their impressive run in the near future. But before going to mid-cap value funds, let’s take a look at the fund inflows. Equity Funds’ First Inflows In 2016 According to Lipper, U.S. funds focusing on acquiring equity securities witnessed inflows of $4.6 billion in the week ending Mar. 9, snapping nine weeks of outflows. While equity funds with a domestic focus attracted $3.47 billion in investments, foreign equity funds saw net inflows of $1.1 billion. Additionally, funds that allocate the major part of their assets in equity securities of emerging markets registered inflows of $1.6 billion – the highest in more than 10 months. Moreover, technology funds registered net inflows for the first time this year by attracting $208 million. Other major sectors including energy, financial and real estate also enjoyed significant inflows last week. Meanwhile, the key categories apart from equity funds, namely taxable bond funds, money market funds and municipal bond funds witnessed net inflows of $5.8 billion, $2.4 billion and $518 million, respectively. However, treasury funds, which have attracted investor attention for the most part of this year, registered an outflow of $326 million. This was the second consecutive week of outflow for treasury funds. Factors Boosting Equities A strong rally in oil prices and encouraging economic data on the domestic front not only abated recessionary fears, but also gave the markets a boost in the trailing one-month period. Last week, the markets ended in the green for the fourth straight week and for the first time since Nov. 2015. Positive comments from the officials of major oil-producing countries regarding production freeze, continued decline in both domestic and global rig counts and expected decline in oil production this year propelled oil prices higher in recent times. Despite Monday’s decline of 3.6%, WTI crude rallied nearly 41.2% since Feb. 11, when it touched a 13-year low. Moreover, recently released economic data gave indications that the U.S. economy is on track for a gradual recovery. While better-than-expected job numbers and a significantly low unemployment rate of 4.9% point to a strong labor market, encouraging personal consumption, income and spending data signal a gradually growing economy. Upward revision in the fourth-quarter GDP rate also boosted investor sentiment. 3 Mid-Cap Value Mutual Funds To Buy As highlighted earlier, mid-cap value mutual funds benefited the most from the recent rebound in the U.S. equity fund categories. According to Morningstar, this category registered a gain of 14.6% over the past one month, which was the highest among the U.S. equity fund categories, indicating its popularity among investors. While large caps are normally known for stability and the smaller ones for growth, mid caps offer the best of both the worlds, allowing growth and stability simultaneously. Moreover, value investing has always been popular, and for good reasons. After all, who doesn’t want to find stocks that have low PEs, solid outlooks and decent dividends? Against this encouraging backdrop, we highlight three mid-cap value mutual funds that carry either a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (Buy). We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund. These funds have encouraging one-month, three-month and year-to-date returns. The minimum initial investment is within $5,000. Also, these funds have a low expense ratio and no sales load. Managed Account Mid Cap Value Opp Fund No Load (MUTF: MMCVX ) invests the lion’s share of its assets in equity securities of companies with market capitalization similar to those listed in the S&P MidCap 400 Value Index. MMCVX may invest not more than 30% of its assets in foreign securities and in securities that are denominated in foreign currencies. Currently, MMCVX carries a Zacks Mutual Fund Rank #1. The product has one-month, three-month and year-to-date returns of 14.6%, 2.7% and 1%, respectively. It has no expense ratio. Touchstone Mid Cap Value Fund Adv (MUTF: TCVYX ) seeks growth of capital. TCVYX invests a large chunk of its assets in common stocks of companies having market capitalization within the range of the Russell Midcap Index. Currently, TCVYX carries a Zacks Mutual Fund Rank #2. The product has one-month, three-month and year-to-date returns of 15%, 3.8% and 2.4%, respectively. Annual expense ratio of 1.02% is lower than the category average of 1.19%. American Century Mid Cap Value Fund Inv (MUTF: ACMVX ) invests a major portion of its assets in securities of mid-cap companies. ACMVX seeks to follow the capitalization range of the Russell 3000 Index in order to select medium-size companies. Currently, ACMVX carries a Zacks Mutual Fund Rank #2. The product has one-month, three-month and year-to-date returns of 10.7%, 4.5% and 2.8%, respectively. Annual expense ratio of 1.01% is lower than the category average of 1.19%. Original post

Cheap Funds Dupe Investors – Q1 2016

Fund holdings affect fund performance more than fees or past performance. A cheap fund is not necessarily a good fund. A fund that has done well in the past is not likely to do well in the future ( e.g. 5-star kiss of death and active management has long history of underperformance ). Yet, traditional fund research focuses only on low fees and past performance. Our research on holdings enables investors to find funds with high quality holdings – AND – low fees. Investors are good at picking cheap funds. We want them to be better at picking funds with good stocks. Both are required to maximize success. We make this easy with our predictive fund ratings. A fund’s predictive rating is based on its holdings, its total costs, and how it ranks when compared to the rest of the 7000+ ETFs and mutual funds we cover. Figure 1 shows that 70% of fund assets are in ETFs and mutual funds with low costs but only 1% of assets are in ETFs and mutual funds with Attractive holdings. This discrepancy is astounding. Figure 1: Allocation of Fund Assets By Holdings Quality and By Costs Sources: New Constructs, LLC and company filings Two key shortcomings in the ETF and mutual fund industry cause this large discrepancy: A lack of research into the quality of holdings. A lack of high-quality holdings or good stocks. With about twice as many funds as stocks in the market, there simply are not enough good stocks to fill all the funds. These shortcomings are related. If investors had more insight into the quality of funds’ holdings, we think they would allocate a lot less money to funds with poor quality holdings. Many funds would cease to exist. Investors deserve research on the quality of stocks held by ETFs and mutual funds. Quality of holdings is the single most important factor in determining an ETF or mutual fund’s future performance. No matter how low the costs, if the ETF or mutual fund holds bad stocks, performance will be poor. Costs are easier to find but research on the quality of holdings is almost non-existent. Figure 2 shows investors are not putting enough money into ETFs and mutual funds with high-quality holdings. Only 78 out of 7421 (1% of assets) ETFs and mutual funds allocate a significant amount of value to quality holdings. 99% of assets are in funds that do not justify their costs and over charge investors for poor portfolio management. Figure 2: Distribution of ETFs & Mutual Funds (Count & Assets) By Portfolio Management Rating Click to enlarge Source: New Constructs, LLC and company filings Figure 3 shows that Investors successfully find low-cost funds. 70% of assets are held in ETFs and mutual funds that have Attractive-or-better rated total annual costs , our apples-to-apples measure of the all-in cost of investing in any given fund. Out of the 7421 ETFs and mutual funds we cover, 1664 (70%) earn an Attractive-or-better total annual costs rating. Clearly, ETF and mutual funds investors are smart shoppers when it comes to finding cheap investments. But cheap is not necessarily good. The Nationwide Portfolio Completion Fund (MUTF: NAAIX ) gets an overall predictive rating of Very Dangerous because no matter how low its fees (0.62%), we expect it to underperform because it holds too many Dangerous-or-worse rated stocks. Low fees cannot boost fund performance. Only good stocks can boost performance. Figure 3: Distribution of ETFs & Mutual Funds (Count & Assets) By Total Annual Costs Ratings Click to enlarge Source: New Constructs, LLC and company filings Investors should allocate their capital to funds with both high-quality holdings and low costs because those are the funds that offer investors the best performance potential. But they do not. Not even close. Figure 4 shows that less than half (49%) of ETF and mutual fund assets are allocated to funds with low costs and high-quality holdings according to our predictive fund ratings, which are based on the quality of holdings and the all-in costs to investors. Figure 4: Distribution of ETFs & Mutual Funds (Count & Assets) By Predictive Ratings Click to enlarge Source: New Constructs, LLC and company filings Investors deserve forward-looking ETF and mutual fund research that assesses both costs and quality of holdings. For example, the Market Vectors Semiconductor ETF (NYSEARCA: SMH ) has both low costs and quality holdings. Why is the most popular fund rating system based on backward-looking past performance? We do not know, but we do know that the transparency into the quality of portfolio management provides cover for the ETF and mutual fund industry to continue to over charge investors for poor portfolio management. How else could they get away with selling so many Dangerous-or-worse ETFs and mutual funds? John Bogle is correct – investors should not pay high fees for active portfolio management. His index funds have provided investors with many low-cost alternatives to actively managed funds. However, by focusing entirely on costs, he overlooks the primary driver of fund performance: the stocks held by funds. Investors also need to beware certain Index Label Myths . Research on the quality of portfolio management of funds empowers investors to make better investment decisions. Investors should no longer pay for poor portfolio management. D isclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, sector or theme. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.