Mutual Funds Comparison » Mutual Funds

Mutual Funds and Their Risks

admin — Wed, 04 Nov 2009 14:15:09 +0000

Investing in mutual funds is a relatively safe way of growing your net worth, but such investments are not entirely free of risks. Before you pick on any particular mutual fund for investment you should watch out for a few things.

Performance

The first thing you should look for is whether the mutual fund you are planning to invest in is outperforming or under-performing with respect to the market. Good and safe mutual funds are those that consistently outperform the market. Changes in the net asset values (NAVs) of such mutual funds are consistently one step ahead of the market. For example, if the index that measures market movements goes up, the NAV of most good and safe mutual funds will also move up at least as much as the market or even more than the market. On the other hand, when the market moves southwards, the NAV of most good and safe mutual funds will move down but such depreciation will be less than or at the most equal to the market’s downward movement. Unsafe or risky mutual funds are those where the opposite occurs – when the market moves up, the NAV of risky or unsafe mutual funds may move up less than the market and may even move down despite a bull run in the market. Such under-performing mutual funds should always be eschewed when taking an investment decision.

Churn and earn

The next thing to watch out for is whether the mutual fund is undergoing too much “churn and earn”. This means you have to check whether too many transactions by the mutual fund are resulting in higher fees or costs to the investor. In this context, the worst offenders are those mutual funds that have a lot of spurious churn. Every time a mutual fund buys or sells stocks, the broker or brokers it employs make a neat pile from the commissions. So, these brokers try to encourage a lot of churn or buying and selling of stocks by giving a kickback to the mutual fund manager. Although direct bribery is illegal, payment of soft money through a sponsored trip to Hawaii or letting the mutual fund manager have a swanky Wall Street office for $1 a month is not. The only loser in all this spurious churn is the investor, especially in cases where the small print says that the investor will have to pay the brokers’ fees as well.

Lack of clarity

Mutual Funds that have prospectus, annual reports or statements of additional information written in such a way that they are difficult to understand should also be avoided. The lack of clarity in their documents is almost a sure sign of lack of honesty in their dealings or a lack of competency in managing funds – both of which are strong reasons for avoiding them for investment purposes.

Risky and unsafe mutual funds are also characterised by having too many restrictions on how and when investors can sell or redeem their mutual fund shares. Mutual funds that have too long lock-in periods or those which slap a hefty exit load at the time of redemption should be eyed with suspicion and are likely to prove to be unsafe and risky.

Beware of scams

Finally, there are mutual funds that are outright scams. There have been reports of fund mangers selling stocks at prices other than what has been reported to the investor. For example, the fund manager may have sold stock at prices that prevailed before closing of the day’s trade although the investor is told that the transaction took place at closing prices which were lower. The manager then pockets the difference and with most such transactions involving large volumes, even a fractional price difference can lead to substantial gains for the manger. Again the only loser in all this is the investor who gets short-changed by the mutual fund operator!

By: Jason Hanson

About the Author:

Jason Hanson recommends you contact the Law Firm of Richardson, Patrick, Westbrook, and Brickman if you need a mutual funds attorney. Learn more at http://www.rpwb.com/mutual_funds/.

Original Post: Mutual Funds Comparisons

Mutual Funds and Their Risks

Top Mutual Funds in India

admin — Wed, 21 Oct 2009 01:55:14 +0000

Deciding or searching for the top mutual funds generally requires lot of things to be taken into consideration. It is here that the role of the fund manager creeps in. The fund manager determines the performance of the fund for that particular period, so it is a compulsion that he is consulted prior to making the investment. Another important segment that should be taken care of is the proper selection of Assets. Asset Allocation is the art of bifurcating your finances into a mixture of Assets (stocks, bonds, etc). It is imperative that some amount of research is done prior to choosing a fund for investment. The performance of a mutual fund over the last few years does give an insight to it’s value. The Mutual fund performance can be known by Mutual Fund NAV i.e. Net Asset Value. It is disclosed on daily basis in case of open-ended schemes and on weekly basis in case of close-ended schemes. It is necessary for all top mutual funds in India to put their NAV’s on the web site of Association of Mutual Funds in India (AMFI) thus the investors can access NAVs of all mutual funds at one place.

.According to latest researches and data available with Association of Mutual Funds in India (body that governs the Mutual Fund houses in India) , it can be described that, since the last 6 months, the entire asset under management or AUM, along with thirty one mutual funds covered at Rs 5,18,123 Crore or Rs 5,181.23 billion. All of the top five mutual funds of India made record in the development of total AUM. They have increased the AUM rate of the Indian mutual fund industry. Being the top mutual fund organization of India, the Reliance Mutual Fund rose the AUM to Rs.80,780 crore from Rs.77,765 crore. On the other hand, the ICICI Prudential Mutual Fund and UTI Mutual Fund rose to Rs.56,854 crore from Rs.52,180 crore. So going through the snapshot you do have an idea as to which Mutual Fund should be invested upon and the factors you would need to take into consideration.

By: Ryan Crown

About the Author:

Investment planner and Fund Manger from India’s leading Mutual Fund house. To read more about Best Mutual Funds click here.

Original Post: Mutual Funds Comparisons

Top Mutual Funds in India

How to Do Mutual Funds Research to Avoid Making Costly Mistakes

admin — Fri, 09 Oct 2009 04:34:14 +0000

In general research means that you are looking into a subject matter. This research can be found in all areas of interest. One area that many people are interested in is that of the stock market. With all of the stocks and bonds that are available there are times when you may not be sure which mutual funds companies are good to invest with. This is where mutual funds research can come in handy.

When you first start your mutual funds research you will need to have clear idea of your end goal. This is important as there are many factors that might have to be investigated. You may decide that the best place to start your mutual funds research is with a back knowledge of what mutual funds are. While this information is something that is needed by the average investor it is also an item that gets overlooked.

For this reason you should first look at the definition that is available for mutual funds. The next item in your mutual funds research is applying the knowledge that you have gained to the actual mutual funds. At this point select about 2 to 4 different mutual funds companies. Look to see what types of stocks and bonds they are offering.

As each of these mutual funds represents various industries, countries and companies you will find a diverse selection awaiting you. You should choose to look at a few different stock options. See in your mutual funds research how these items have preformed over a past 5 year period. You will gain an idea as to the way the market regards these items.

Next your mutual funds research should involve seeing the differences that are applicable to the fees. Since the area of mutual funds investment is very competitive there are various mutual funds companies that will have fees which are detrimental to your portfolios asset value.

These fees are mainly hidden in the type of load that is offered with the mutual fund. You will notice in your mutual funds prospectus (which you should have for each mutual fund) the type of load which has been designated for that fund. These loads are level loads, front-end loads and deferred loads. Of these many loads the best one to look for is that of a no-load fund.

In a no-load mutual fund you as the investor have no worries regarding the fees for buying and selling stocks and bonds. Your mutual funds research will reveal to that in many instances no-load mutual funds go hand in hand with index mutual funds. These funds are set to closely match the markets current prices.

By looking at all of these factors and the Morningstar reviews you can choose the mutual funds portfolio that most catches your eye. With the help of mutual funds research you now have the means at your fingertips to avoid making costly mistakes.

By: Muna wa Wanjiru

About the Author:

Muna wa Wanjiru is a Web Administrator and Has Been Researching and Reporting on Mutual Funds for Years. For More Information on Mutual Funds Research, Visit His Site at Mutual Funds Research

Original Post: Mutual Funds Comparisons

How to Do Mutual Funds Research to Avoid Making Costly Mistakes

Important Mutual Fund Concepts

admin — Tue, 22 Sep 2009 11:07:50 +0000

Are you thinking about investing in the stock market? If you are, it is highly likely that you are considering investing in a mutual fund. A mutual fund gives you stock market exposure, diversification, and the professional selections of a seasoned stock picker.

Most average investors park at least some of their money in mutual funds. Often though, they are confused by some of the terminology and concepts associated with mutual fund investing. Sometimes, this is not a big deal, whereas other times ignorance of a few key concepts can severely impact their long-term returns. Here’s a few key mutual fund concepts.

Load: This is the up-front fee the mutual fund charges for investing in the fund. Whatever load you pay goes straight to the mutual fund and anyone that happened to be marketing the fund. People that try to sell mutual funds that charge loads try to claim that they are somehow better than other mutual funds. This is nonsense. Paying a load is simply paying an extra, unnecessary fee. Always invest in no-load mutual funds , otherwise you are just wasting 5% of your investment by paying someone’s commission.

NAV: Net asset value. This is the closing price of the mutual fund after a day’s trading. You can see how well the mutual fund is performing by changes in its NAV.

Management Fee: This is the fee the mutual fund charges you for investing your money. All mutual funds charge a management fee; otherwise they would not be able to operate. However, you do not want to be needlessly paying too high of a management fee. Look for mutual funds that charge management fees of 1.5% or less.

Morningstar Rating: This is the rating the mutual fund was given due to its past performance compared to its peers. While past performance is not a guarantee of future performance, it is a somewhat useful indicator in helping you decide whether or not you want to trust your money to this mutual fund or not. Remember though that the mutual fund’s performance will largely be a result of the fund’s chief manager. If the manager changes, then looking to the past performance of the fund is somewhat worthless.

Net Assets: This is how much money the mutual fund manages. Some mutual funds just manage $100-$200 million of investor’s money. Others manage up to $50 billion. The advantage of a larger mutual fund is that they sometimes charge lower fees due to efficiencies of scale. However, in general, a smaller mutual fund is better. This is because they are more nimble and can invest in more of a variety of companies. The larger mutual funds have to invest in very large companies. After all, if a $50 billion mutual fund invested in a $500 million, just parking 1% of the fund’s assets would buy the whole company!

By: Ling Tong

Original Post: Mutual Funds Comparisons

Important Mutual Fund Concepts

All About Mutual Fund Investments

admin — Tue, 15 Sep 2009 00:22:33 +0000

Definition

One definition of Mutual fund states that they are mutually admitted assets invested in different securities. Shareholders are issued bonds as grounds of their control and benefit proportionately in the earnings of the fund.

Various mutual fund options

One of the vital factors that an individual must study when looking at various mutual fund options is that if their money should be an actively managed fund or an indexed fund. All assets include individual stocks, but an actively managed fund will modify these stocks on a regular basis in an endeavor to acquire as much profit as possible. Indexed assets are intermeshed around specific index containing a good cross section of the stocks within this index. The shares are rarely traded and the performance is usually indicates the sole performance of the index. While it is wise to consider the gains form certain sectors, you also should be cautious about sectors that can be adversely affected by a single factor.

Some of the benefits of mutual fund

As in any other investment opinions differ, some suggest that mutual funds do not have a diverse investment potential, whereas other argue that there are a number of advantages in mutual funds.

Mutual funds adapt a strategy to invest funds in various investments, which is the key to high profits. As mutual funds do not compel clients to invest big money, the low investment capital encourages even the small investor to utilize the opportunity to earn high profits. Purchasing mutual funds certificates or selling them is very easy, which makes it convenient for every type of investor. As mutual funds are managed by professionals with good experience in investments, the chances of high profit is greater than in other investments made by an individual.

Safety concerns

As far as mutual funds are concerned safety of the investments are not guaranteed. Moreover the performance of the mutual fund highly depends on the expertise of the managing professionals. With no assurance of guaranteed profits and possibilities of losing money in case of major change in economy, mutual funds only become a secondary or tertiary option for long term investors. However, most short term investors have gained much by investing in the mutual funds only at their own risk.

Securities and Exchange Commission which regulates the mutual funds ensures that all mutual funds are set up and run according to the rules of the government. The commission also sees to that there is a certain degree of transparency between the mutual funds and the investors. It also ensures that other costs and fees of the mutual funds are properly documented so that it gives the investor a crystal clear picture of their investments.

By: KAMS

About the Author:

Mutual Fund Types adapt a strategy to invest funds in various investments, which is the key to high profits. As mutual funds do not compel clients to invest big money, the low investment capital encourages even the small investor to utilize the opportunity to earn high profits. Purchasing mutual funds certificates or selling them is very easy, which makes it convenient for every type of investor.

Original Post: Mutual Funds Comparisons

All About Mutual Fund Investments

7 Best Mutual Funds for 2009

admin — Sat, 05 Sep 2009 19:44:26 +0000

As our economic outlook continues to be poor and as the stock market is in turmoil, stock investing has become increasingly difficult. Maintaining a solid investment portfolio can be hard work. One alternative to the difficult work of stock selection is to invest in mutual funds. With thousands of mutual funds to choose from, how can you tell which ones are the best?

That’s why I have compiled a list of the 7 Best Mutual Funds for 2009. After researching the performance, stability, and income of hundreds of top-rated funds, I found the best mutual funds to invest in for 2009 and beyond.

Income-Dividends

One part of my selection process was to find mutual funds with cash flow, either through dividends or bond interest payments (in the form of dividends for mutual funds). This factor is becoming ever more important during a time when stocks continue to decline. Through dividends you can know that you will have an income of the yield percentage.

Future Trends

Another selection criteria was to find mutual funds that are going to perform well for years to come. As you will see, I have included a mutual fund that invests in stocks of alternative energy or “green” companies. The whole environmentally-friendly, green movement is just getting started and will be a boon to the economy for the next 10-20 years. One aspect that is somewhat more of a near-term strategy is the gold focused fund because of the predicted rise in the price of gold over the next year or two.

Long-Term Performance

The last and most important selection criteria was the long-term performance of the mutual fund. Any one stock or mutual fund can perform well over one or two years by luck, but it takes true skill to manage a portfolio that has good returns over a ten year period. A major failure of many investors that buy mutual funds is that they chase the fund that is currently performing the best or just recently had its best year. If the mutual fund is having an unbelievably great year, then either stay away from it because it’s too late or sell it if you own it.

The 7 Best Mutual Funds for 2009:

1. American Century High-Yield Fund (AHYVX)

- With the current state of the economy, your best bet for making money is finding an investment with a stated income (i.e. dividends, bond interest payments). American Century’s High Yield Fund has a dividend yield of 9.38%, which is much larger than most high yielding mutual funds or stocks.

2. The New Alternatives Fund (NALFX)

- this is the perfect mutual fund for times when people and companies are looking for environmentally-friendly ways of doing things. This mutual fund invests in companies that focus on renewable energy sources, as well as companies that are concerned with energy conservation and environmental protection. Over the next decade green and alternative energy stocks will most likely sky-rocket with gaining popularity and necessity.

3. Franklin Utilities Fund (FKUTX)

- A utilities fund is also a great way to get a flow of decent income during a time of poor stock performance. This mutual fund has a dividend yield of 4% and a 10-year annualized return of 5.17%, which is very impressive. Utility companies are a solid investment for having a stream of dividend income.

4. ING Corporate Leaders Trust Fund (LEXCX)

- Although its 10-year annualized return has been hurt by the recent stock market downturn putting it at 3.67% (which is better than all but two main value strategy mutual funds), ING’s fund has performed 10% better than the S&P 500 over the past year. It also has a dividend yield of 2.46%.

5. Franklin Gold and Precious Metals (FKRCX)

- This mutual fund has been a top performer over the past decade with a 10-year annualized return of 14.42% and a current dividend yield of 8.34%. This mutual fund has performed amazingly, and it will continue to perform with gold becoming more of a flight-to-safety investment for investors.

6. Vanguard Energy Fund (VGENX)

- although the commodities boom of earlier this year has faded, oil prices will come back. It is only a matter of time. Vanguard’s Energy Fund has had a 10-year annualized return of 14.81%, which is better than most mutual funds of any kind. It is positioned to perform well over the next few years.

7. Municipal Bond Fund (of your choice)

- municipal bond rates have gone up in recent months and continue to be a great source of extra income. For example, some bonds in Florida are paying 6% a year in interest. Remember with municipal bonds that interest payments are tax-exempt; just make sure you pick a bond that is within your state (otherwise interest payments become taxable). How does a tax-free income of 5% or 6% on your investment sound for 2009- with the U.S. still in recession?

By: Jared Schneider

About the Author:

Jared Schneider is the owner and current writer for InvestorPitStop.com.

His writings have been published on SeekingAlpha.com, and is a featured Expert Author for EzineArticles.com. He is also a luxury real estate professional for Century 21 Elite Properties in Orlando, FL.

Original Post: Mutual Funds Comparisons

7 Best Mutual Funds for 2009

Should You Invest In Mutual Funds Or Stocks?

admin — Sat, 05 Sep 2009 04:40:18 +0000

With so many options out there for the individual investor, it is sometimes difficult to determine that investments are right for you. The key to having a long-term, stable and profitable portfolio is to diversify your investments. For many investors the process of diversification includes investing in both mutual funds and stocks. The best course is to learn all you can about both types of investments and find your ideal balance between the two.

Mutual funds are open-end funds that are not listed for trading on a stock exchange. They are created by companies who use their capital to invest in other companies. Mutual funds will sell their own new shares to investors. Capitalization is not fixed and normally shares are issued as people want them.

1. Mutual funds have great characteristics for investors

Mutual funds are professionally managed. The mutual funds employ professional managers to operate all investing. These professional managers bring with them many years of experience. They are experts in selecting and evaluating investments for the fund. The managers make all of the buying decisions and selling decisions that relieves the individual investors from that responsibility.

2. Mutual Funds Are Diversified

Another advantage of mutual funds is that most of their portfolios are highly diversified. This means that the mutual fund is invested in a wide variety of stocks. The advantage of diversification is that if a few stocks drop in price the entire fund won™t be dramatically affected. Diversification occurs by investing in many different companies. It can also be accomplished by investing in several different industries. The advantage of diversifying through mutual funds is that the funds can reach a wider diversification than can be reached by individual investors.

3. There are thousands of mutual funds to choose from

Depending on your preferences, you can choose to invest with a mutual fund that covers the whole market or with a fund that focuses on one or two industries. There are even mutual funds available that invest only in foreign markets. Mutual funds can be very convenient for the investor since the fund does all the record keeping. Your mutual fund will provide you with all the forms you need to file your taxes. Additionally, many may offer perks such as the ability to write checks against the money market fund.

4. Stocks Have Greater Returns (Potentially)

On the other hand, purchasing individual stocks has attractive features as well. After the brokerage fee is paid, there is no ongoing fee associate with owning individual stocks. This is in contrast to mutual funds that charge a participation fee. Mutual fund fees can totally negate the mutual fund return that you are expecting.

With investing in individual stocks, an investor has the ability to be very flexible with their investing and move with market if they so desire. Mutual funds are very stable but this also keeps them slow. Individual stock investments can be traded quickly if need be, and purchased just as quickly if the investor finds an undervalued stock.

5. More Control

With individual stock investing, an investor has a greater level of control over their investing. Although brokerage firms are involved there is the opportunity to be more hands on with the stock purchases. This level of involvement is impossible with mutual funds. Many investors like to know exactly where their money is going and this can be hard with a mutual fund that holds shares in 50 or more companies. Investing in individual stocks allows the investor to have a larger relationship with the company they are investing in. This can create a sense of comfort for the investor because they know where their money is being used. They can track the activities of the company they have invested in and feel like a true part of that company.

6. The Verdict

Investing a mixture of mutual funds and individual stocks seems to the best method for a majority of investors. Those who do not want to take the time to research their stocks and would rather let an expert handle things are more comfortable with mutual funds. On the other end of the spectrum, those who want a greater level of participation with their investments will find individual stock investing attractive. As part of a long-term diversification strategy it may be best to look into both in the ratio that you are comfortable with.

By: John Morris

Original Post: Mutual Funds Comparisons

Should You Invest In Mutual Funds Or Stocks?

Mutual Funds 101

admin — Sun, 23 Aug 2009 08:50:24 +0000

Money makes the world go round, and don’t we all know it! All of us are looking for ways to get ahead financially. Mutual funds are one way to increase your net worth by becoming involved in collective investing. Investing in mutual funds reduces the risks of individual trading by making you part of a collective of investors. These mutual funds can provide you with a prospectus of fees and their past performance to help you make the right decision about where to put your money. Independent rating services will also guide you in finding a mutual fund that has the same goals as you.

The Basics of Mutual Fund Investment

You may be wondering “what are mutual funds?” Not everyone has a huge deal of knowledge about investing and stocks. Many of us have some money tucked away for a rainy day, and a little in our superannuation. Now, more than ever, is the time to understand how to make your money work for you. Mutual funds pool together money from numerous investors and invest this collective sum into stock, bonds and various other investments. Your money is professionally managed with the aim of benefiting all shareholders in the mutual fund. The risk of losing money is reduced by diversifying the investments. Also, mutual funds are cost efficient. Investing money together increases buying power and reduces operating costs per person. A major perk of investing in mutual funds is that it’s a lot more liquid than other forms of investment, so if you’re finding yourself a little short of cash you can actually sell some of your funds shares.

Investing Your Money In Mutual Funds

Investing in a mutual fund means that you have access to the services of a mutual fund manager. This means a professional is handling the daily trading of assets on your behalf. A mutual fund manager oversees the investment portfolio, and is responsible for finding the best possible returns for the invested dollar.

You can choose to invest your money in lump sums or with automatic investment. Lump sum investment in a mutual fund will typically mean you can invest as much or as little as you have, provided that it is above the minimum requirements of the fund. Automatic investment can help you save money on a regular basis, by transferring a part of your income into the fund on a regular basis.

Making Money From Mutual Funds

The value of a mutual fund is divided into shares, and the value of each share is determined at the end of every trading day. Money is earned in appreciation, dividends or capital gains distribution. It’s important that you look at the past performance when you choose a mutual fund, because not all are equal. Don’t forget to take into account fees and expenses against the average yearly return.

How You Can Benefit From Mutual Funds?

All investment comes with risk. It is possible to lose money invested in mutual funds. Long term, this risk can be managed with some strategic investing, but can be a little disconcerting in the short time. Investments have the potential to both increase and decrease in value, in line with economic change, but in the long term investments do tend to increase with time. These same risks are found in the housing market and traditional stock trading. Mutual funds reduce the risks slightly with the ability to weather some financial instability due to diverse investing.

If anyone you know is still asking “what are mutual funds?” it’s time to let them in on our little secret. Mutual funds are a relatively low risk way to make the most of the money you have. By investing with others you’re able to make the most of the money you have and increase your assets. Your mutual fund manager handles the investment decisions for you whilst your net worth continues to increase over time.

By: Bob Winter

About the Author:

Bob Winter has been in the finance industry for many years and does some writing in his spare time. His area of interest is mutual funds and finding the best mutual fund. He believes that it is important to understand the basics of the money market to get the best out of your investment. Visit him at Super Mutual Funds to get a better insight.

Original Post: Mutual Funds Comparisons

Mutual Funds 101

“mutual Funds are Subject to Market Risk. Please Read the Offer Documents Carefully Before Investing”

admin — Wed, 19 Aug 2009 16:33:47 +0000

You must have read this statement many a times in the TV commercials and also on the form that you must have filled and wondered what does this line mean. Let me tell you this line means. I do agree that the mutual funds are subject to market risk but that market risk if you go to consider is very minimal. Thanks to the stringent regulations employed by SEBI (Stock Exchange Board of India)..

Please note that mutual funds do not provide any guarantee of returns or capital (initial amount you invested).

Mutual funds are a good place to start because they offer you the opportunity to diversify quickly into a range of investments

Hence, nobody can assure you of returns, or even not suffering losses. Going strictly by the book, the possibility of a fund performing exceptionally poorly and all your savings dwindling to nothing is quite real.

Having said that, please remember that over the long term, the possibility of such an extreme event is quite negligible. If the historical performance is to go by, then there are hardly any diversified equity funds which have delivered negative returns over the last 10 years, if one would have invested through the SIP.

Therefore, there is no need to be overly concerned. Mutual funds are a very convenient vehicle for individual investors.

Moreover, returns tend to be commensurate with the kind of risk you take. Mutual fund schemes are riskier than the assured return schemes like fixed deposits and bonds. But, they also have the potential to generate far superior returns.

It is upon the investor to strike a balance between the return he wants to earn and the risk he wants to take. Having done that, he can invest in an appropriate combination of assured return schemes (National Savings Certificate, Public Provident Fund, post office schemes, bonds from institutions) and mutual funds.

Mutual Funds come under the regulation of the Securities and Exchange Board of India and have to meet stringent regulations. Therefore, they cannot just close shop and run away with investors’ money.

Mutual Funds comes under SEBI scanner and so does all the other public offering and there is a security deposit that they have to pay for getting listed. The chance of being fraudulent is negligible. With the growing number of people investing in mutual funds they are making it more reliable.

In fact, India happens to have quite stringent rules and norms regarding the setting up of an AMC and making periodic portfolio disclosures (stating where their have invested their money).

Moreover, in the set-up of a mutual fund, there is a body of trustees who are supposed to look after the interest of investors whose money is being managed under different schemes.

The mutual fund itself is a trust registered under the Indian Trust Act, and is initiated by a sponsor. The sponsor is the person who acts alone or with another corporate to establish a mutual fund. The sponsor then appoints an AMC to manage the investment, marketing, accounting and other functions pertaining to the fund.

Therefore, while it may be possible for a mutual fund to inflict losses to the investors as a result of poor fund management, they just can’t wind up their operations and run away with your money.

Mutual funds you can invest in

Share Market

Kotak Mutual Fund

Franklin Templeton India Mutual Fund

Birla Sunlife Mutual Fund

Prudential ICICI Mutual Fund

HDFC Mutual Fund

TATA Mutual Fund

Sundaram Mutual Fund

Cholamandalam Mutual Fund

Standard Chartered Mutual Fund

DSP Mutual Fund

Principal Mutual Fund

SBI Mutual Fund

Reliance Mutual Fund

Deutsche Mutual Fund

ABN AMRO Mutual Fund

J M Financial Mutual Fund

ING Vysya

Optimix

HSBC Mutual fund

Fidelity AMC

For more information on Mutual Funds and Investments visit Kotak Mutual Fund

By: Mossan Smith

About the Author:

Share Trading Online

Original Post: Mutual Funds Comparisons

“mutual Funds are Subject to Market Risk. Please Read the Offer Documents Carefully Before Investing”

Supercharged Mutual Fund ETF

Jordan J. Weir — Wed, 01 Apr 2009 22:27:51 +0000

It has been consistently demonstrated that your investment returns aren’t so much a function of what stocks your invested in, but what sectors/asset classes your invested in. In the dot com boom, it didn’t matter what dot com stock you invested in, if you were invested in dot com companies, you probably did alright. During the dot com bust, it wasn’t just a couple select companies that went down, it was just about all of them. Because of this tendency for similar stocks to move together, it is much more productive to be able to simply buy ” or short – a type of stock, then try and nail the exact right company. But how can you gain exposure to a sector without taking unnecessary risk based on the company?

Exchange Traded Funds are the answer. Exchange traded funds (ETFs) allow you to invest in a group of companies all at once, similar to a mutual fund. The difference is that ETFs are traded directly on a stock exchange just like a stock, they can be bought and sold any time during the day without penalty, and they are both shortable, and optionable allowing you to take advantage of both up, and down moves in the market.

ETFs can focus on certain regions; China for instance, is represented by the FXI. ETFs can focus on certain sectors; Those playing financial stocks may find XLF interesting. It can even focus on certain capitalizations; Those wanting diversification across small cap companies can make a single investment in IWM.

But why shun the mutual fund? Why take the new guy over the established king? Lets start with the tax advantage. When mutual funds endure large sell offs, they have to liquidate many positions, some of which are currently at a gain. They then have to pay capital gains on those positions, and this negatively impacts their return. It would be an understatement to say that Mutual funds generally have higher expense ratios in general compared to ETFs. It can sometimes cost as little as 8 dollars to get into an ETF whereas a mutual fund of 20,000 that grows to 60,000 over a 20 year period may have conservatively lost as much as 18,000 to its competent managers.

Perhaps the biggest consideration is the simple convenience of owning ETFs when compared to mutual funds. They can be bought and sold (or shorted) any time during the trading day, using the same order types available to normal stocks. Free from redemption fees, the only deterrent from actively trading an ETF is belief in the efficient market hypothesis, and the standard commission costs from buying and selling stocks

A great boon to ETF investors, never before experienced by mutual fund holders, is the ability to use stock options to control risk. Stock options can be used to reduce the risk by using covered calls, or buying protective puts. Alternatively, call options can be used to control maximum loss, and potentially increase profits.

There are some disadvantages to ETFs as well. Some ETFs have complex structures that can lead them to deviate from what they are supposed to be tracking. A similar instrument, ETNs, can also easily be mistaken for an ETF, leading to some general confusion about what exactly you are investing in. Yet for those willing to put in the work to learn, ETFs can be a highly profitable venture for the modern day portfolio.

The only reason not to use ETFs is a lack of understanding, for they really are one of the most revolutionary investment tools of the 21st century. Their ability to reduce risk through diversification across an asset class, while still effectively giving an investor exposure to an entire sector, should be taken advantage of by everybody, for both long and short plays. ETFs are an invaluable asset for everyone invested in any stock market, and their advantages should be used to the fullest.

About the Author:

The first step to making money in the markets is learning them, so visit my website and become a market virtuoso! Come and master hidden techniques such as ETF Investing, stock option strategies, sector rotation, and shorting stock! Release the true power of Exchange Traded Funds in your portfolio, and allow your portfolio to be the best it can be

Original Post: Mutual Funds Comparisons

Supercharged Mutual Fund ETF

How Mutual Funds Are All About Mediocrity

C.P.Billows — Tue, 31 Mar 2009 13:36:08 +0000

My first investment was in mutual funds which is what most people invest in because the mutual fund industry is very effective at promoting its products. There is a certain sense of security knowing that everyone else is also buying mutual funds.

The problem is that for most of us we have been sold a product that does what it says but does not deliver what you need.

Yes, mutual funds do invest in the stock market.

Yes, mutual funds do diversify the risk over hundreds of stocks but

No, most mutual funds do not give you the returns you need.

Diversify and Die?

Mutual Funds will give you built in diversification. Some of them invest in entire stock market indexes, others invest into a combination of stocks and bonds, and some invest into other company mutual funds (which are called Fund of Funds, yikes!).

Diversification of your investment money is important. You should never put all of your money into one company. Because you have no control over how that company does or how other investors react to the company’s news, it is best to hedge your dollars by spreading the risk around.

Yet it is possible to over-diversify. Because mutual funds have so much money to invest, they struggle with finding good companies to buy. To keep to the rules of diversifying the portfolio, they cannot invest usually more than 5% of their assets in one single company. This results in lots of dollars being invested into companies you would never consider.

Mutual Funds have to buy lots of mediocre or bad companies because they need to diversify and do something with the billions of dollars they have. It gives the fund shareholders the impression that their money is being invested and the fund managers gladly charge you a healthy management fee.

Active Management is an Expense

Professional management of millions of dollars does not come cheap for most mutual funds. You can expect to pay 2% up to 8% for some specialized funds. These means that if you make 5% return, you would have actually have earned 8% if the Management Fee is 3%. That means that the Mutual Fund has to earn 3% before they can even pay you.

Dollar Cost Averaging is not a benefit if you are getting poor returns. Believe me, I invested consistently for fifteen years directly into various mutual funds. I bought over $125,000 in mutual funds with the biggest dealer and ended up with an averaged return of a criminal 2.05% a year!

It makes far more sense to contribute to a money market fund where there are no fluctuations and then use that fund to make your investment purchases.

Mutual funds do have the advantage of providing liquidity. You can sell and have your cash within a couple of days. But the question is begged why are you pulling out? Investment money is money you should not need right away.

Mediocrity is the Name of the Fund

The sad fact about Mutual Funds is that most them rarely beat the market. It is estimated that only 1.3% of American Mutual Funds will beat the S&P 500. Mutual Funds are investment products and should not be seen as a complete investing solution.

Mutual Funds that get 20% returns in one year have a poor chance of duplicating their results. Companies do a better job of providing consistent performance compared to MFs. If you buy a mutual fund that did well you have a greater chance of it doing poorly the following year.

But just like the stock market where most of them are not worth investing into, the same thing exists in the mutual fund industry. There does exist a small segment that does capture decent, but not market-beating returns. If you want to delegate some of your investment dollars to the responsibility of another, then mutual funds are the way to go. But when doing so, you need to lower your expectations.

The Best Solution: Take Control

If you want diversity protection, low management expenses, and equivalent to market results get Exchange Traded Funds. They should make up a decent portion of your portfolio. You can only get those by opening up a brokerage account.

But while you are opening up a brokerage account and doing dome research into Exchange Traded Funds, you might as well look into investing into stocks. It is only in the stock market where you can get market beating returns and stay way ahead of inflation and taxes.

Stop accepting the pale imitation of stock market returns through the veil of mutual funds. Invest directly and take control. There are plenty of information about Exchange Traded Funds, direct investing in Equities, and Stock Options. Its a classic scenario of time vs money. You are saving time but losing control, and also lots of opportunity to make money.

About the Author:

C.P.Billows is the publisher of In The Money, the Stock Options Trading Course, a 60 page eBook available at www.mandalainvesting.com. Click here for article submissions.

Original Post: Mutual Funds Comparisons

How Mutual Funds Are All About Mediocrity

Are Bond Mutual Funds a Safer Bet?

Samantha A. Bow — Sun, 15 Mar 2009 16:22:08 +0000

Investing is a risky process. When you invest, you have to keep the degree of risk you are taking on in the back of your mind. More risk means an increased possibility that you will lose money. If you invest high risk, there’s a good possibility you’ll lose money whereas if you invest in a low risk investment, you will be less likely to lose money. Your goal should be to make as money money as you can with as little risk as possible.

Different types of investments carry varying degrees of risk. Let’s say you have $10,000 that you want to loan for investing and you have 2 friends that need money to start a new business. The first friend has borrowed and repaid money to you many times before. You have trust with them that they will pay you back.

The other friend has borrowed money from you before and didn’t always pay you back. Sometimes it was just $20 they borrowed for lunch, but somehow they just conveniently forgot about it. They want to borrow the money for their new business that they feel confident about, and they swear they will pay you back. Unfortunately, they have failed in past businesses and didn’t pay back the money they borrowed.

The second friend is very risky, but to you, their business idea sounds incredible. You could see it making a lot of money and you’re friend promises that you can share half of the profits. On the other hand, your first friend has a pretty ordinary idea and they promise they’ll pay you back with 8% interest.

You have a lot more risk in the second friend, but you will make a lot more money with them. You have almost no risk with the first friend, but you’re only going to make 8%, no matter how well the business does. You have to decide if you are willing to take the risk on more profit.

The same goes with stocks and bonds. Stocks are more risky, but you could earn a lot more. Bonds are less likely to earn more money, but you’ll at least get back what you put in. The same goes with stock and bond mutual funds.

If you are going to retire soon or if you have already retired, you should focus more of your funds into bond mutual funds. These carry less risk which ensures you will have the money you need once you reach retirement. You don’t want to take too many risks with the money you need to live on.

While your young, invest more in stocks. As you get older you can invest more and more in conservative bonds. This method will allow you to make the most without worrying about losing it.

About the Author:

Are you interested in investing in bond mutual funds? Learn more about them and funds like money market mutual funds. Learn whatever you can and start investing!

Original Post: Mutual Funds Comparisons

Are Bond Mutual Funds a Safer Bet?

Benefits of Mutual Funds

Samantha Asher — Wed, 04 Mar 2009 18:14:33 +0000

by Samantha Asher

It is very important that you invest your money. If you think you can’t and yet continue buying movie tickets and video games, you need to reconsider your priorities. Instead of buying junk, you should be buying stocks and bonds. I know I’m making it sound simple, but in actuality, it is. Once you get started saving your money, you’ll have money to invest and you can begin learning everything you can about investing.

If you haven’t started investing yet, you probably don’t know much about it. Fortunately, you don’t need to be a financial genius or college professor to start investing. You don’t have to even know the intricacies of stocks or bonds, there is an easier way.

If you are to invest in stocks or bonds, you need to do research beforehand. If you don’t, you are gambling with your money. If you know nothing about the company you’re investing in, you could be setting yourself up for disaster. By investing in mutual funds, you can make money without putting hours and hours into it. A mutual fund is when many people pool their money together and a professional in finance chooses the stocks to buy.

If you’re worried about the cost, don’t be. Load funds can be pricey with lots of fees. There are also no-load funds which have no funds. They are rarely an inferior investment. Sometimes they can even earn more than a load fund.

With mutual funds that charge a commission, you lose a percentage of your earnings where as with no-load funds, you get all of your return. So even if the loaded fund has a higher return, you might still be making less with it.

Investing in mutual funds are excellent at diversifying your portfolio, especially if you only have a little to invest. By buying with other people, you can buy a wider variety of stocks and not worry about risk as much. If you invested in individual stocks, you could only invest in a few stocks, causing more risk.

Diversifying your stock will decrease risk because if one stock goes down, it’s likely another stock will go up and at least offset it. Basically, you are reducing the risk that your entire portfolio will decrease in value.

You can get started in investing even if you don’t know much about stocks and bonds. Mutual funds are the perfect way to get started. You can start investing with as little as $1,000. Sharebuilder will get you started right away investing.

About the Author:

What are mutual funds exactly? go and learn more about investing in mutual funds and how to begin. Don’t delay, begin investing today!

Original Post: Mutual Funds Comparisons

Benefits of Mutual Funds

Picking Stocks and Mutual Funds Successfully

Korruptd — Tue, 03 Mar 2009 20:26:05 +0000

by Korruptd

No matter what your experience is, when you buy stocks the one thing you consider first is whether or not the company has a strong balance sheet. Ignoring this one important piece, could very well cost you a lot of money.

Besides considering that first piece of information, you must make sure that the stock is valued correctly. Should you start to think that buying undervalued stocks means learning about buying penny stocks then you may end up losing money no matter what. Simply put, knowing how to pick stocks like the pros means learning how to buy stocks cheap.

What does this all have to do with cheap stocks? Buying cheap stocks means purchasing them when they are trading below face value. Knowing how to find and buy these cheap stocks is how the gurus make all their money on the market.

What do you do to buy a stock when it is cheap? You must first find a sector that should be performing well or should be performing better. Very that the PE multiple of your stock is favorable when compared to it’s competitors PE multiple. If you have a favorable position and the stock should be at a higher price, you probably just found an under priced stock. Buying the stock should be considered if you think the price should be higher.

Can you then get away with not learning how to start trading mutual funds? Only a fool would think so. Denying yourself the option of learning other ways to invest would be extremely foolish. Don’t be a fool and learn how to invest in mutual funds as well. You might regret not taking the opportunity to learn it. Mutual funds should be a perfect way to grow your savings and retirement money consistently over several years. And who wants to be one of the broke and regretful fools?

About the Author:

At the end of the day you do not need to know how to trade forex or run a hefty self directed roth IRA to become wealthy.

Original Post: Mutual Funds Comparisons

Picking Stocks and Mutual Funds Successfully

Mutual Funds for Young Investors

Jack White — Wed, 18 Feb 2009 13:50:32 +0000

by Jack White

Beginner investors can be quite confused as to where to invest their money. So what is the best bet, stocks or mutual funds for young investors? In this article, I describe the difference between the two and where you can get find great stocks and mutual funds for young investors.

When you invest in stocks, you have ownership of a particular company. With mutual funds, you have ownership of a few companies. This provides you with much more diversity in your investment. Not only this, the mutual fund can also include investments in bonds or cash that allows your mutual fund to make subsequent stock purchases. For these reasons, mutual funds for young investors may be the way to go.

One mistake that young investors make, is that they assume their investment is completely safe. An investment in a mutual fund is an investment in the market, the same as a stock investment, which fluctuates. Your mutual fund may lose value. However, mutual funds for young investors are still the safer investment alternative.

You now know the difference between stocks and mutual funds for young investors and have decided to invest. With the current technology, brokers have made it extremely easy to invest from home. There are hundreds of websites up that do not charge to start a new account. Do your research though, because different companies do have different trading rates for mutual funds for young investors. Usually the minimum investment is $1000.

Mutual funds for young investors is what I reccomend in closing. Over the course of your life, mutual funds for young investors will bring you higher returns. By the time you reach retirement age, you will have set yourself up with a beautiful nest egg.

About the Author:

The writer of this segment, Jack White, is a seasoned investor. He has made millions on his investments and reveals alot of important advice on his mutual funds blog. Click Mutual Funds for Young Investors

Original Post: Mutual Funds Comparisons

Mutual Funds for Young Investors