Why Vanguard’s Actively Managed Funds Are a Better Bet #vanguard #actively #managed

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Why Vanguard’s Actively Managed Funds Are a Better Bet

In 1991, Dan Wiener, a magazine reporter covering mutual funds, decided to get into the newsletter business. As the name he chose for his letter made clear, the mission of the Independent Adviser for Vanguard Investors would be to provide unbiased advice to clients of the Malvern, Pa. fund giant. Explains Wiener: “As a mutual fund writer, I had all this information at my fingertips that average investors didn’t. And investors got no advice from Vanguard, so I thought this might be valuable.”

See Also: Four Great Actively Managed Vanguard Funds

Within a year, Wiener had quit his day job. Today, says Wiener, the letter has 36,000 subscribers who pay up to $229 for a one-year subscription (new customers can get a one-year subscription for $99.95 at http://adviseronline.investorplace.com ).

Wiener’s candor is one of the letter’s big draws: He doesn’t shy away from blasting Vanguard when he believes criticism is warranted. Wiener, who is also chief executive of Adviser Investments, a Newton, Mass. advisory firm with $3 billion under management, spoke with us about his news­letter, where Vanguard falls short and the one fund firm that every investor should have money with. (Hint: It’s not Vanguard.)

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KIPLINGER’S: Why a newsletter only about Vanguard funds?

WIENER: In the early years, there was no such thing as a mutual fund supermarket. So you were either a Fidelity investor or a T. Rowe Price investor or a Vanguard investor or an investor with another firm. I had begun to invest money for my kids at Vanguard because I felt it offered funds run by some managers I wanted to put my money with. Vanguard had the Primecap Management guys running Vanguard Primecap (symbol VPMCX ), which is now closed to new investors. It had a team from Wellington Management running Vanguard Health Care (VGHCX ). Jim Barrow was running Vanguard Windsor II (VWNFX )—without a lot of the managers who have been added since, mucking up his perform­ance. So you had really good managers running some excellent funds.

Vanguard, of course, is famous for its index funds. Do you object to indexing? I think you can do better. As indexing has become more popular, it leaves more stock-picking opportunities to the good fund managers. I would be thrilled if everybody indexed except for the people who read my newsletter and my clients at Adviser Investments.

How do you choose the funds you recommend? I’m not a buyer of mutual funds. I’m a buyer of managers. A good stock picker can outperform his or her index. It’s easier to do that at Vanguard because Vanguard funds have low expense ratios, whether they are index funds or actively managed funds.

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Does the size of a fund matter? Size absolutely matters. Unfortunately, when a fund gets too big, Vanguard adds a second, a third, a fourth, a fifth manager rather than shutting it. Look at Vanguard Explorer (VEXPX ). It used to be run by Wellington and once had a tremendous track record. Now it’s overrun with eight subadvisers. It’s like putting eight chefs in the kitchen and telling them all to make one kind of soup. It’s just awful.

What’s the problem? You end up with an index-like fund with index-like risk. Until recently, funds such as Explorer, as well as Morgan Growth (VMRGX ) and Windsor II, have been staples of 401(k) plans. And in 401(k) plans, you don’t want a fund to underperform by too much. So what Vanguard has done is to dumb down these funds to make them palatable for retirement plans. Vanguard should have closed them to new investors a long time ago. But there’s a benefit to keeping the funds open: Starting a new fund is more expensive than running a multibillion-dollar fund.

Do top-down, big-picture factors play a role in determining your fund picks or your model portfolios? We—I and my director of research, Jeff DeMaso—are not trying to time the market. If we think the economy is going to do well, we might give a little more money to a manager with a portfolio that’s more cyclically oriented and take money away from a manager who is more growth-oriented. But the bottom line is, we’ve got great managers working for us, so why second-guess them? We’ve done well. Vanguard founder Jack Bogle said outperforming the market by even one percentage point per year is a huge feat, and we’ve beaten it by better than two percentage points per year using Vanguard funds. [Over the past 20 years, Wiener’s growth portfolio returned 12.1% annualized, compared with 9.7% for Vanguard 500 Index (VFINX ).]

What are your favorite Vanguard funds? My three top picks are Dividend Growth (VDIGX ), Health Care and Selected Value (VASVX ). [Dividend Growth and Selected Value are members of the Kiplinger 25 .] These three funds provide the core of a terrific portfolio. Dividend Growth is run by Wellington’s Don Kilbride. The stocks he owns tend to be what I call battleships: firms with strong balance sheets. I can’t say enough good things about having an overweight exposure to health care in a portfolio. Demographics pretty much demand it. [For more on this topic, see The Best Health Mutual Funds to Buy Now .] As for Selected Value, the majority of it is still run by Jim Barrow and Mark Giambrone, of Barrow, Hanley, Mewhinney & Strauss. These guys are excellent. The fund has just added a third subadviser, but as long as Barrow and Giambrone run the bulk of the portfolio, I’ll be happy.

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And then you have to leave Vanguard to get a piece of the Primecap Management guys, who specialize in growth stocks. I like any fund run by the Primecap team. The firm manages three outstanding Vanguard funds, but they’re all closed to new investors. But two funds sold by Primecap, Odyssey Growth (POGRX ) and Odyssey Stock (POSKX ), are still open.

Does Vanguard shortchange its active managers? Yes. How many times do you hear Vanguard say, “We have these great active managers”? Ed Owens, the longtime manager of Health Care, who retired in 2012, had probably the single best track record in the entire industry. And Vanguard barely mentioned his name. Meanwhile, look up the “select” funds on Vanguard’s Web site. This really gets me. It says, “Build your portfolio with a few of our well-established, broadly diversified low-cost funds, selected by our Port­folio Review Department.” Vanguard selects three index funds and three actively managed funds: Explorer, Morgan Growth and Windsor II. C’mon, guys. That’s just embarrassing.





How to Raise Funds on Facebook: 6 Steps (with Pictures) #how #to

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How to Raise Funds on Facebook

Social networking communities are a powerful way to build awareness of your favorite cause or charitable organization. A Facebook page can establish a sense of transparency, legitimacy and trust among supporters. Every time you share news about your organization, show who it helps and how donors’ money is being spent you are building loyalty that can result in additional donations. Keeping your page current and showing where contributions are applied can create an ongoing relationship with your audience while encouraging them to give again, provided that your Facebook page has an application that enables cash donations on the spot. Here’s how to raise funds on Facebook:

Steps Edit

Set up a Facebook page for your fundraising cause. Whether you want to raise money for a certified non-profit charity or help pay for someone’s medical expenses, you can raise money on Facebook by creating a compelling Facebook page to share your story through pictures, video and words.

Add a donation application to your Facebook page. Fund raising apps such as GoGetFunding.com and FundRazr make it easy for people to give online.

  • Enable donation applications to access your page’s profile information. This ensures it will appear on the pages of every Facebook fan you currently have. Once installed, a special box will appear on your Facebook wall. This allows people to make charitable donations to your group without ever leaving Facebook.
  • Create a budget to pay for for fund-raising applications. Some will charge a fee of a few cents each time a transaction is processed. This fee is usually less than if you had a credit card processing merchant account that enables organizations to take credit cards. Most fees are based on a percentage of the total cash transaction but sometimes a monthly fee is charged instead.

Investigate additional Facebook compatible fund-raising applications. Look for software that integrates your group’s page into other devices like mobile devices. Applications such as mGive are built specifically for non-profit charities to make it easy for them to reach out to donors and easily raise money through cell phones and social networks.

  • Utilize applications that save your organization money. Many are free. They can provide an interface that integrates into your Facebook fund-raising page and enable users to donate through PayPal. In return, you only pay a small fee to PayPal based on the transaction amount.

Promote your page within Facebook. Search within Facebook for people in your existing contact list. Strategically choose those who seem close to your cause, then send a personalized message through Facebook that asks them to “like” your page.

Bring your target audience to your Facebook page.

  • Get active in social networks that are close to your cause. Look for discussion groups, newsletters and other places where people who may be interested in your group gather.
  • Actively promote your campaign on social networking websites such as Twitter. Present concise descriptions of your most compelling news and always provide a link to visit your Facebook fund-raising page.

Monitory your Facebook fund-raising page activity. Facebook’s free data analysis tools, called “Insights” will page administrators what people are doing on your page and how long they are staying there.





Best Target-Date Funds for Retirement Savers #retirement #date #funds

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Best Target-Date Funds for Retirement Savers

Target-date funds are more popular than ever these days, in part because they have become standard features of workplace retirement plans. But the best thing about target-date funds is that the managers take care of everything. They craft a portfolio of stocks, bonds and other assets that are appropriate for your time horizon. And over time, the fund managers rebalance regularly and gradually shift the asset mix to a more conservative blend.

See Also: 9 Mutual Funds for Volatile Markets

But not all target-date funds are created equal. Three features, it turns out, can make the difference between a good target-date fund and a bad one. The so-called glide path—the proportion of stocks and bonds in the portfolio and how it changes over time as the target date approaches—is one factor. Another, of course, is the innards—the quality of the funds that fill the portfolio. (Target-date funds are usually made up of several other funds from the same fund family.) Finally, expenses matter. As with any investments, the less you pay in annual fees, the better. Taking those factors, as well as a few others, into consideration, we found five target-date series worthy of mention. (All returns and data are as of September 18.)

American Century One Choice

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Risk-averse investors will appreciate this target-date fund series because it has a conservative glide path—at least in the beginning. For instance, the One Choice 2055 (AREVX ) target-date fund (the fund furthest from its target date) generally holds 85% of its assets in stocks and 15% in bonds. The average 2055 target-date fund has 90% in stocks and 10% in bonds.

The good thing is that, despite having less in stocks, you don’t give up much in the way of performance, and you get a slightly smoother ride. Over the past three years, mostly a period of strong returns for U.S. stocks, the One Choice 2055 fund produced an above-average return with below-average volatility. Its 9.0% annualized return ranks among the top 28% of all 2055 target-date funds, and the fund was 7% less volatile than the average fund in its category. Better yet, during the choppy market of recent weeks, this fund and its One Choice target-date brethren held up much better than most of their rivals.

The funds in the One Choice series hold 18 to 21 American Century funds, many of which were top performers in their category, at least in recent years.

One last note: The target-date series’ glide path stays fixed after the funds hit their target year. But that final allocation may be more aggressive than the early part of its glide path would suggest. The One Choice In Retirement Portfolio (ARTOX ) usually holds 45% in stocks, 45% in bonds and 10% in cash. The typical target-date retirement income fund, by contrast, has 31% in stocks and 54% in bonds and 14% in cash and other investments, including preferred stocks and convertible bonds.

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American Funds Target Date

As a rule, Kiplinger doesn’t recommend funds that levy sales charges. And that’s why we don’t often write about the American Funds, which offers many fine products but charges a load if you buy the fund directly or through an adviser who is compensated through commissions. But investors generally don’t pay a load to buy shares in American target-date funds if the funds are offered in their workplace retirement plan.

American is one of the biggest and oldest fund firms in the country. Many of its funds are among the biggest, by assets, and have solid track records. Such outstanding funds as New Perspective (ANWPX ) and Washington Mutual (AWSHX ) fill the Target Date series, which is one reason we like it. Other positives: Low fees and a glide path that shifts quarterly and continues to do so for 30 years after a fund has reached the target date.

Most of the funds in the American Target Date series rank in the top 10% of their peer groups over the past five years. American Funds 2030 Target Date (AAETX ), which launched in early 2007, has outpaced most of its peers in every calendar year except 2010. The fund returned an annualized 10.3% over the past five years, ranking among the top 3% of 2030 target-date funds.

Schwab Target

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Schwab’s target-date series has been around since 2005. But with just $3 billion in assets, it’s tiny compared with the likes of Vanguard and T. Rowe Price, which have $178 billion and $122 billion in assets, respectively, in their target-date products.

Even so, Schwab investors haven’t been disappointed. With a mix of actively managed and index funds from Schwab, as well as from Dodge & Cox, Loomis Sayles, Metropolitan West and Wells Fargo, among others, this series has racked up an impressive track record. Over the past 10 years, for instance, Schwab Target 2020 (SWCRX ) has returned 5.4% annualized, which ranks among the top 5% of its peer group. Target 2030 has done even better: Its 6.1% annualized 10-year return ranks among the top 3%.

Since being named manager in February 2012, Zifan Tang has made several changes to the target-date portfolios, according to Morningstar. Tang altered the glide path in 2013 to boost the funds’ exposure to U.S. bonds and lessen the exposure to foreign bonds. In 2014, she boosted the funds’ holdings in U.S. stocks while trimming the allocation to foreign stocks. Last September, Tang abruptly removed Pimco Total Return from the Schwab lineup when Bill Gross resigned—also abruptly—from Pimco. And this year, Tang removed all Treasury inflation-protected securities (TIPS) from portfolios with target dates running from 2030 through 2055.

We like the series’ below-average fee schedule (the Target 2030 (SWDRX ) fund costs 0.72% in annual expenses, according to the fund’s prospectus, which is well below that of the typical 2030 target-date fund, at 0.99%). And we like the glide path, which starts out aggressively, with more than 90% of assets in stocks when you have 40 years to go before you retire, and ends conservatively, as a fund shifts for another 20 years after it reaches the target year, to an ultimate mix of 25% stocks, 66% bonds, and 9% cash.

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T. Rowe Price Retirement

T. Rowe’s flagship Retirement target-date series has won high marks from many, including Kiplinger. The obvious reason is the funds’ above-average allocation to stocks. For example, Retirement 2030 (TRRCX ), which is designed for those who expect to retire around 2030, devotes 77% of its assets to stocks; the average 2030 target-date fund holds 70% of its assets in stocks. Even Price’s Retirement 2015 fund, with 54% in stocks, is more aggressive than the typical 2015 target-date portfolio, which on average has 45% in stocks. The series’ underlying funds have provided some oomph, too. Among the 18 funds in Retirement 2020 are T. Rowe Price Value (TROW ), a member of the Kip 25 as well as MidCap Growth (RPMGX ), New Horizons (PRNHX ) and Small-Cap Stock (OTCFX ).

Not surprisingly, the high stock allocation means above-average volatility. In 2008, when the S ?>

Mutual Funds – Federal Bank #mutual #funds, #investment, #investment #solutions, #invest #in

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Mutual Funds

Money is one of the biggest necessities of life. Today, more than ever before, with rising aspirations, numerous opportunities to spend and longer life spans, merely earning a good income is not enough; it is equally important to invest your money wisely to ensure that it generates a good return. But selecting appropriate financial tools can sometimes be a bit tricky. And, that’s exactly why it always helps to know as much as you can about investing.

What is a mutual fund?

A mutual fund allows a group of people to pool their money together and have it professionally managed, in keeping with a predetermined investment objective. This investment avenue is popular because of its cost-efficiency, risk-diversification, professional management and sound regulation. You can invest as little as Rs. 1,000 per month in a mutual fund. There are various general and thematic mutual funds to choose from and the risk and return possibilities vary accordingly.

  • Professional investment management.
  • Diversification of Portfolio.
  • Low Cost of Investment.
  • Convenience and Flexibility to invest any amount anytime.
  • Quick and Personalized Services from AMC.
  • Ease of Investing.
  • High Liquidity.
  • Choice of Dividend or Growth Options.
  • Tax Savings Funds also available

Federal Bank has tied up with the following leading AMCs in the country:

If you are interested to invest in Mutual funds, please visit any of our branches

Apply for PAN Card Online

Diversification involves holding a wide variety of investments in a portfolio so as to mitigate risks. Mutual funds usually spread investments across various industries and asset classes, constrained only by the stated investment objective. Thus, by investing in mutual fund, you can avail of the benefits of diversification and asset allocation, without investing the large amount of money that would be required to create an individual portfolio.

Mutual funds employ experienced and skilled professionals, who conduct investment research, and analyze the performance and prospects of various instruments before selecting a particular investment. Thus, by investing in mutual funds, you can avail of the services of professional fund managers, which would otherwise be costly for an individual investor.

In an open-ended scheme, unit holders can redeem their units from the fund house anytime, by paying a small fee called an exit load, in some cases. Even with close-ended schemes, one can sell the units on a stock exchange at the prevailing market price. Besides, some close-ended and interval schemes allow direct repurchase of units at NAV related prices from time to time.

Mutual funds offer a variety of plans, such as regular investment, regular withdrawal and dividend reinvestment plans. Depending upon one’s preferences and convenience, one can invest or withdraw funds, accordingly.

Since mutual funds have a number of investors, the fund’s transaction costs, commissions and other fees get reduced to a considerable extent. Thus, owing to the benefits of larger scale, mutual funds are comparatively less expensive than direct investment in the capital markets. *

Mutual funds in India are regulated and monitored by the Securities and Exchange Board of India (SEBI), which strives to protect the interests of investors. Mutual funds are required to provide investors with regular information about their investments, in addition to other disclosures like specific investments made by the scheme and the proportion of investment in each asset class.

*Mutual Funds are subject to market risk. Please read the offer document carefully before investing. Terms and Conditions apply

Systematic Investment Plan (SIP)

Mutual Fund Systematic Investment Plan (SIP) gives an opportunity to create wealth over long term. Systematic Investment Plan is like a Recurring Deposit wherein the investor needs to remit a fixed amount into a chosen scheme for a predefined period. The advantage of SIP is that there is a lot of flexibility to change all these parameters subsequently also based on any change in our Investment Horizon or our expectations from the schemes.

SIP work using two important levers- Power of compounding and Rupee cost averaging

How does Power of compounding work in SIP?

The compounding refers to the re-investment of income at a rate of return to constantly grow the principal amount year after year. Getting the benefit of the Power of Compounding requires the customer to remain invested for a longer period. Starting early in life and remaining invested focusing on specific goals is the basic mantra of investment. An illustration is given below to prove the point:

Suppose a monthly SIP is for Rs 1000 and the fund’s net asset value (NAV) is Rs 10. This will result in 100 units being credited to you. However, next month, on account of volatile market conditions if the fund’s NAV falls to Rs 5, you will get 2,00 units. This will lower your average purchase cost. A SIP helps you to buy more when the stock market is falling and less when it is rising.

SIP – A SMART Investment Option through Federal Bank.

S Specific – Investment amount should based on a financial goal.

M Measurable – Performance disclosures at regular intervals help keep track of your investments.

A Available – Availability of Hand Picked Funds

R Relevant – Relevant schemes according to your requirement

T Timely – Helps you adopt a disciplined approach towards investing

Documents Required

The following documents are required for investing into Mutual funds:

  • CAF (Common Application Form)
  • Auto Debit/ ECS Mandate forms
  • KYC forms (One-time registration of KYC compliance is required for investment across all funds.)

Proof of Identity (POI)

  1. PAN card with photograph.
  2. Unique Identifi cation Number (UID) (Aadhaar)/Passport/Voter ID card/Driving license.
  3. Identity card/ document with applicant’s Photo, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc. to their Members; and CreditCards/Debit cards issued by Banks.

Proof of Address (POA)

  1. Passport/Voters Identity Card/Ration Card/Registered Lease or Sale Agreement of Residence/Driving License/Flat Maintenance bill/Insurance Copy.
  2. Utility bills like Telephone Bill (only land line),
  3. Bank Account Statement/Passbook -Not more than 3 months old.
  1. Copy of passport/PIO Card/OCI Card and overseas address proof (Bank Statement) is mandatory.
  2. PAN card with photograph.

For MICRO SIPs (Resident and NRI) Micro SIPs – the aggregate of installments in a rolling 12 month period or in a financial year i.e. April to March does not exceed Rs 50,000/- Unique Identification Number (UID) (Aadhaar)/Passport/Voter ID card/Driving license

Prevent Unauthorized Transactions in your demat account – Update your Mobile Number with your Depository Participant. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat account directly from NSDL on the same day. Issued in the interest of investors.

KYC is one time exercise while dealing in securities markets – once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.

No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor’s account

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© The Federal Bank Limited, Regd. Office: Aluva, 2013





When To Sell A Mutual Fund #sell #mutual #funds

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When To Sell A Mutual Fund

If your mutual fund is yielding a lower return than you anticipated, you may be tempted to cash in your fund units and invest your money elsewhere. The rate of return of other funds may look enticing, but be careful; there are both pros and cons to the redemption of your mutual fund shares. Let’s examine the circumstances in which liquidation of your fund units would be most optimal and when it may have negative consequences.

Mutual Funds Are Not Stocks
The first thing you need to understand is that mutual funds are not synonymous with stocks. So, a decline in the stock market does not necessarily mean that it is time to sell the fund. Stocks are single entities with rates of return associated with what the market will bear. Stocks are driven by the “buy low, sell high” rationale, which explains why, in a falling stock market, many investors panic and quickly dump all of their stock-oriented assets.

Mutual funds are not singular entities; they are portfolios of financial instruments. such as stocks and bonds. chosen by a portfolio or fund manager in accordance with the fund’s strategy. An advantage of this portfolio of assets is diversification. There are many types of mutual funds, and their degrees of diversification vary. Sector funds. for instance, will have the least diversification, while balanced funds will have the most. Within all mutual funds, however, the decline of one or a few of the stocks can be offset by other assets within the portfolio that are either holding steady or increasing in value.

Because mutual funds are diverse portfolios rather than single entities, relying only on market timing to sell your fund may be a useless strategy since a fund’s portfolio may represent different kinds of markets. Also, because mutual funds are geared toward long-term returns, a rate of return that is lower than anticipated during the first year is not necessarily a sign to sell.

When Selling Your Fund
When you are cashing-in your mutual fund units, there are a couple of factors to consider that may affect your return:

  • Back-end loads – If you are an investor who holds a fund that charges a back-end load. the total you receive when redeeming your units will be affected. Front-end loads. on the other hand, are sales fees charged when you first invest your money into the fund. So, if you had a front-end sales charge of 2%, your initial investment would have been reduced by 2%. If your fund has a back-end load, charges will be deducted from your total redemption value. For many funds, back-end loads tend to be higher when you liquidate your units earlier rather than later, so you need to determine if liquidating your units now is optimal.
  • Tax consequences – If your mutual fund has realized significant capital gains in the past, you may be subject to capital gains taxes if the fund is held within a taxable account. When you redeem units of a fund that has a value greater than the total cost, you will have a taxable gain. The IRS has more detailed information on capital gains and their calculations in “Publication 564: Mutual Fund Distributions .”

When Your Fund Changes
Do keep in mind that even if your fund is geared to yielding long-term rates of returns, that does not mean you have to hold onto the fund through thick and thin. The purpose of a mutual fund is to increase your investment over time, not to demonstrate your loyalty to a particular sector or group of assets or a specific fund manager. To paraphrase Kenny Rogers, the key to successful mutual fund investing is “knowing when to hold ’em and knowing when to fold ’em.”

The following four situations are not necessarily indications that you should fold, but they are situations that should raise a red flag.

Change in a Fund’s Manager
When you put your money into a fund, you are putting a certain amount of trust into the fund manager’s expertise and knowledge, which you hope will lead to an outstanding return on an investment that suits your investment goals. If your quarterly or annual report indicates that your fund has a new manager, pay attention. If the fund mimics a certain index or benchmark. it may be less of a worry as these funds tend to be less actively managed. For other funds, the prospectus should indicate the reason for the change in manager. If the prospectus states that the fund’s goal will remain the same, it may be a good idea to watch the fund’s returns over the next year. For further peace of mind, you could also research the new manager’s previous experience and performance.

Change in Strategy
If you researched your fund before investing in it, you most likely invested in a fund that accurately reflects your financial goals. If your fund manager suddenly starts to invest in financial instruments that do not reflect the mutual fund’s original goals, you may want to re-evaluate the fund you are holding. For example, if your small-cap fund starts investing in a few medium or large-cap stocks, the risk and direction of the fund may change. Note that funds are typically required to notify shareholders of any changes to the original prospectus.

Additionally, some funds may change their names to attract more customers, and when a mutual fund changes its name, sometimes its strategies also change. Remember, you should be comfortable with the direction of the fund, so if changes bother you, get rid of it.

Consistent Underperformance
This can be tricky since the definition of “underperformance” differs from investor to investor. If the mutual fund returns have been poor over a period of less than a year, liquidating your holdings in the portfolio may not be the best idea since the mutual fund may simply be experiencing some short-term fluctuations. However, if you have noticed significantly poor performance over the last two or more years, it may be time to cut your losses and move on. To help your decision, compare the fund’s performance to a suitable benchmark or to similar funds. Exceptionally poor comparative performance should be a signal to sell the fund.

The Fund Becomes Too Big
In many cases a fund’s quick growth can hinder performance. The bigger the fund, the harder it is for a portfolio to move assets effectively. Note that fund size usually becomes more of an issue for focused funds or small-cap funds, which either deal with a smaller number of shares or invest in stock that has low volume and liquidity .

When Your Personal Investment Portfolio Changes
Besides changes in the mutual fund itself, other changes in your personal portfolio may require you to redeem your mutual fund units and transfer your money into a more suitable portfolio. Here are two reasons which might prompt you to liquidate your mutual fund units:

  • The need to rebalance your portfolio – If you have a set asset allocation model to which you would like to adhere, you may need to rebalance your holdings at the end of the year in order to return your portfolio back to its original state. In these cases, you may need to sell or even purchase more of a fund within your portfolio to bring your portfolio back to its original equilibrium. You may also have to think about rebalancing if your investment goals change. For instance, if you decide to change your growth strategy to one that provides steady income, your current holdings in growth funds may no longer be appropriate.
  • Need a tax break – If your fund has suffered significant capital losses and you need a tax break to offset realized capital gains of your other investments, you may want to redeem your mutual fund units in order to apply the capital loss to your capital gains.

The Bottom Line
Selling a mutual fund isn’t something you do impulsively, without a great deal of thought and consideration. Remember that you originally invested in your mutual fund because you were confident in it, so make sure you are clear on your reasons for letting it go. However, if you have carefully considered all the pros and cons of your fund’s performance and you still think you should sell it, do it and don’t look back.

In international trade, the export by a country or company of a product at a price that is lower in the foreign market than.

An offer to purchase some or all of shareholders shares in a corporation. The price offered is usually at a premium to the.

A fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange.

A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is.

The additional satisfaction a consumer gains from consuming one more unit of a good or service. Marginal utility is an important.





Rudlings Wakelam Solicitors Bury St Edmunds Thetford Brandon #rudlings #wakelam, #solicitors, #will

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All of our teams work closely together, sharing ideas and challenging current thinking – pushing the boundaries to give you the service we can. For over 90 years, we have found that this approach works. Our service is founded on strong and long lasting relationships with our clients that are built on trust, and our clients return to us as their ‘trusted advisor’ time and time again throughout their lives.

At Rudlings Wakelam, we do not only strive to do the things right but to do the right thing. When you become a client, we promise to:

  • provide you with the highest standards of client service
  • be open, approachable and friendly
  • treat you with respect and dignity at all times
  • work with you to achieve the best outcome for you
  • provide you with advice that is practical and clear
  • ensure that quality is at the forefront of everything we do for you
  • ensure that our fees are transparent, with no hidden surprises

We have 3 offices across East Anglia – Bury St Edmunds, Brandon and Thetford. We have 4 partners, 25 other solicitors and support staff and offer a broad portfolio of services to our clients, whether they are individuals, businesses or organisations. We have a reputation for being a friendly, approachable and forward thinking practice that truly does provide advice through every aspect of your life.

Quite simply providing ‘. advice for life’ .

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The best investments for generating retirement income – CBS News #best #high

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The best investments for generating retirement income

  • Steve Vernon
  • MoneyWatch

Apr 22, 2013 7:16 AM EDT

The U.S. is the only advanced in economy in the world that doesn’t require employers to offer paid vacation time. Close

(MoneyWatch) Suppose you’ve done a good job investing and accumulating money in your IRA and 401(k) plan, and now you’re trying to decide how to best invest those assets to generate retirement income. Which investments might work best for you at this stage of the game?

While the answer isn’t the same for everyone, the decisions you have to make regarding asset allocation for those investments are. Each of us needs to determine the appropriate mix of investments (such as stocks, bonds, annuities and real estate) for our own situation, and we also need to choose specific investment products and services.

Welcome to Week 10 of my series ” 16 Weeks to Plan Your Retirement .” It’s time to discuss the considerations you’ll need to take into account when choosing investment vehicles for your retirement savings. You’ll also need to decide which of the retirement income generators (RIGs) I discussed in my previous post you’ll want to use to generate retirement income. If you haven’t read that post yet, you may want to review it first to more easily understand this post. Ready? Then let’s get started.

RIG No. 1: Invest your retirement savings, and use just the interest and dividends to generate retirement income.

For this purpose, I like using low-cost, no-load, broad-based mutual funds balanced between stocks and bonds. When you’re searching, look for a fund that adopts the strategies advocated by CBS MoneyWatch bloggers Allan Roth and Larry Swedroe. Keep the fees low (under 50 basis points and the lower, the better), and periodically rebalance the asset allocation between stocks and bonds to stay within prescribed targets, which enforces discipline to buy low and sell high.

Consider funds that invest at least one-third but no more than two-thirds in stocks, with the remainder invested in bonds. This type of allocation gives you the potential for growth to keep up with inflation, with protection against stock market declines. In today’s market, these types of investments will generate investment earnings of about 2 percent to 3 percent per year, depending on the specific asset allocation you’ve selected, with potential for future growth in both principal and dividend amounts. A few good funds that invest along these lines are the Vanguard Wellesley Fund (VWIAX ), the Vanguard Balanced Fund (VBIAX ), and the Vanguard Wellington Fund (VWELX ).

Target date funds that have reached their target retirement year may also fit the above goals. And a reasonable alternative for some of your investments might be mutual fund REITs (real estate investment trusts), since this type of investment can also give you income with the potential for growth.

If you’d followed such a strategy for the first 12 years of this century, which included two stock market crashes, you would have ended with more money than you started with, and you would have enjoyed a steady flow of investment earnings that had only mild fluctuations. You would have survived one of the worst periods for investing!

If you want to live on your investment earnings, I’d avoid using CDs or cash equivalents — interest rates are just too low right now to offer much income. And even if interest rates rise in the future, I’d be very concerned about a future repeat of the past few years.

On the other hand, I wouldn’t seek the highest-yielding stocks or bonds either, as these assets often have underlying risks and the high yields can evaporate.

You can use Morningsta r to help you evaluate and shop for the types of mutual funds mentioned here.

The advantage of this investing strategy combined with this RIG is that you keep your principal intact, and you don’t need to sell investments to generate retirement income. You don’t need to panic and sell when the market drops. The disadvantage is that this method usually generates the lowest amount of retirement income.

RIG No. 2: Use systematic withdrawals in which you invest your retirement savings and withdraw principal cautiously.

If this is the method you’ve decided to select for generating retirement income, then the same kinds of investments I mentioned above work well here, too — with a caveat. Here’s one scenario you want to avoid: exhausting your savings because you invested well above 50 percent of your assets in stocks, withdrew too aggressively (well over 4 percent of your account balances), and experienced a stock market decline in the first 10 years of your retirement.

To protect against this possibility, either invest conservatively (with under 50 percent of your assets in stocks) or withdraw conservatively (take out just 3.5 percent or less of your savings each year or both. Frankly, I’d rather see you hold back on withdrawals in your early years of retirement and only increase your withdrawals if you experience positive returns for 10 years or more to make sure you don’t outlive your money. T. Rowe Price has a good online calculator to help estimate failure rates of different combinations of asset allocations and withdrawal rates. You should use it to help you figure out an asset allocation and withdrawal plan that works best for you.

Be sure not to overlook your 401(k) plan at work for investments that can generate income in retirement. It’s possible your plan offers funds similar to the ones I’ve described in this post with lower fees than you can get as a retail customer with a financial institution.

Stay tuned for my next post, which discusses the best ways to buy an annuity.

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Best mutual funds 2016 #best #debt #funds

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Best mutual funds 2016

It’s been a tumultuous year for many investors. As the bear market for commodities continues to take its toll, equity markets that are heavily dependent on commodities, including Canada’s, have continued to suffer. However, long-term investors who chose to invest in our Honour Roll funds, at least for part of their portfolio, have generally fared better than the rest. More than 70% of last year’s Honour Roll has delivered superior returns versus their peers.

That is not to say Honour Roll funds are only good for bad years. Over the past 15 years MoneySense has been rating Canada’s best mutual funds, roughly a similar percentage of Honour Roll funds have out-performed their peers. If you stick to our methodology, you could have a very good chance of staying ahead over the life of your investments. That’s a claim no other mutual fund ranking in Canada can make.

Five year success rate

The percentage of past fund picks that went on to perform above their category average over five years:

How the funds are chosen

Because I don’t like losses, my number one investing rule is “keep your principal safe.” It’s why my selection methodology excludes funds with very high volatility as well as funds that perform poorly in down markets. I also exclude funds with another major impediment to long-term performance: high investment cost. Otherwise, our Honour Roll funds meet strict crite ria for consistent above-average per formance and value added from active port folio management, which I measure using risk-adjusted return. This year, I had to raise the minimum consistency requirement to 60% (versus above 50% for other categories) for Canadian equity funds in order to reduce the Honour Roll funds to a manageable number. As a result, the selected 17 funds in that category all have unusually high consistency of returns. In the tables that follow, you’ll find the best-performing funds in their respective categories. We’ve also include ratings for risk and cost, so you can pick the funds that are the best fit for your portfolio.

What lies ahead?

In a nutshell? Market divergence. While commodity-dependent economies, such as Canada, Australia and some emerging countries, will remain in the penalty box throughout 2016, several high-income countries, like the U.S. and most of Europe will fare better, but only in relative terms.

Against this backdrop, you have one choice: Stay the course. The science of market prediction is as reliable as astrology. Rather than fear what is to come, remember that market fluctuations are a fact of life.

This all underscores the importance of remaining diversified. Yes, you can continue to expect weakness in Canadian equities and the Canadian dollar, but every cycle invariably works itself out. Weak prices will push high-cost producers out of business and shrinking supplies will bring balance to commodity prices. It could happen later this year, or the next, but it will happen.

For those reasons, it is important to avoid big bets. This year’s model portfolios (see Best bets for your RRSPs ), which I prepare each year, help you achieve opti mal diversification among asset classes, sectors and geographies. I continue to exclude bond funds from the Honour Rolls. Canadian bond yields have dropped to extremely low levels such that most managed funds would post flat or negative results after subtracting management fees. Therefore, rather than investing in a managed bond fund, you are better off filling the bond component of your portfolio with a cheap index bond fund or ETF.





Annuity or mutual fund for retirement? #annuity #mutual #funds

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Annuity or mutual fund for retirement?

Dear Dr. Don,
I have a large amount of money in a bank account making less than 1 percent interest. It s not a retirement account. I have been looking at annuities that will not lose principal but keep your money safe and promise income for life, and mutual funds that pay dividends but have market risk. I am 55 years old and would like to retire at 66 at my full retirement age. I do have a 403(b) account, but I would like this money to be invested outside of a retirement account. What is the better choice?
Marge Mutual

Dear Marge,
Depending on the type of annuity you choose, you could have some of the same investment choices in the annuity that you have with the mutual funds. A variable annuity invests your money in subaccounts that you pick from the ones available with the insurance company. There s market risk in variable annuities, but it can be limited by insurance provisions in the annuity contract. In contrast, a fixed annuity pays a stated rate of interest on the annuity balance. Variable annuities have a level mortality and expense, or M E, fee that a mutual fund doesn t have, but it s those M E fees that fund the insurance component of the annuity contract.

The monies invested in an annuity contract are tax-deferred, like your 403(b) investments, while investing in a mutual fund in a taxable account has annual income tax implications. That s because a mutual fund is required to distribute out to its shareholders any dividend income and realized capital gains.

Another option is to invest in stocks and bonds in a taxable brokerage account. The advantage to this is that you can, to an extent, manage the tax impact of your investments. You don t realize a capital gain (or loss) until you sell an investment. A possible advantage here is a step-up in basis if the investments were to be inherited at your death. This advantage depends on the estate tax code in effect when you die.

If you re eligible for a pension and Social Security benefits in retirement, I d hesitate to recommend investing in an annuity contract, because you already have two sources of retirement income that are annuities.

I suggest working with a fee-only financial planner to help you decide where and how to invest the money. The Bankrate feature, Financial planners: Not just for millionaires anymore , can help you pick one, as can the National Association of Personal Financial Planners publication, Pursuit of a Financial Advisor Field Guide .

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter .

Ask the adviser

To ask a question of Dr. Don, go to the Ask the Experts page and select one of these topics: Financing a home, Saving Investing or Money. Read more Dr. Don columns for additional personal finance advice.

Bankrate s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate s Terms of Use .

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Sierra Mutual Funds #total #returns, #investment #management, #investment #solutions, #risk #mitigation, #downside

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Investors should carefully consider the investment objectives, risks, charges, and expenses of the Sierra Mutual Funds. This and other information about the Fund is contained in the prospectus and should be read carefully before investing. The prospectus can be obtained by clicking here or by calling toll free 1-866-738-4363 (1-866-RETI-FND ). The Sierra Mutual Funds are distributed by Northern Lights Distributors, LLC, member FINRA /SIPC. Wright Fund Management, LLC is not affiliated with Northern Lights Distributors, LLC.

The Sierra Core Retirement Fund invests in underlying funds, including mutual funds, closed-end-funds and ETFs. In some instances it may be less expensive for an investor to invest in the underlying funds directly. There is also a risk that investment advisers of those underlying funds may make investment decisions that are detrimental to the performance of the Fund. Investments in underlying funds that own small and mid-capitalization companies may be more vulnerable than larger, more established organizations to adverse business or economic developments. Investments in underlying funds that invest in foreign equity and debt securities could subject the Fund to greater risks including currency fluctuation, economic conditions, and different governmental and accounting standards.

The Sierra Strategic Income Fund invests in underlying funds that may invest in foreign emerging market countries that may have relatively unstable governments, weaker economics, and less-developed legal systems, which do not protect investors. In general, the price of a fixed income security falls when interest rates rise. Any strategy that includes inverse securities could cause the Fund to suffer significant losses. Underlying fund investments in lower-quality bonds, known as high-yield or junk bonds, present greater risk than bonds of higher quality. Municipal securities are subject to the risk that legislative changes and economic developments may adversely affect the value of the Fund’s investments. REIT risks include declines from deteriorating economic conditions, changes in property value, and defaults by borrower. Underlying funds that own small and mid-capitalization companies may be more vulnerable than larger, more established organizations to adverse business or economic developments. In some instances it may be less expensive for an investor to invest in the underlying funds directly.

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The Prince – Princess of Wales Hospice Tribute funds #noosa #sun #motel

#prince of wales hospice

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Taking your Tribute Fund online is a great way for family and friends to keep up to date with the progress of the Fund.

You can upload pictures and write journal entries about the person the Fund is honouring and anyone can sign the visitors’ book, leave messages or light a candle.

Anyone can help the Fund grow; with a secure web page, your Tribute Fund can accept tax-efficient donations from anywhere in the world or if your family and friends prefer, they can set up their own sponsorship or gift pages that contribute directly to the Fund.

All donations raised through your Tribute Fund will go towards the vital work of The Prince Princess of Wales Hospice.

Start a Tribute Fund

In a few quick steps you can create a lasting tribute for a loved one.

MuchLoved /The Prince Princess of Wales Hospice 1998-2016 | Terms Of Use