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Entries in Mutual Funds (2)

Monday
Oct242011

Dodge & Cox Tops List of Best Mutual Funds

Comstock Images/Thinkstock(CHICAGO) -- Morningstar is out with its latest ranking of the best and worst mutual fund families, with Dodge & Cox and T. Rowe Price ranking best and second-best, respectively, and Hartford, BlackRock and Alliance Bernstein hugging the bottom.

Asked if anything in this year's rankings surprised him, Russel Kinnel, Morningstar's director of research, says yes: that fund giant Fidelity placed only 22nd.

"I was surprised Fidelity came in that low," he says. "Their foreign stock funds aren't performing very well. Their muni funds, though, are good." Any other surprises? "Yes, that Hartford was so far down." Hartford ranked 29th, one notch above bottom anchorman ING Retirement Funds.

Morningstar's Top 10 mutual fund companies:

1. Dodge & Cox

2. T. Rowe Price

3. American Funds

4. Franklin Templeton Investment

5. MFS

6. Thornburg

7. Vanguard

8. Harbor

9. JPMorgan

10. Legg Mason/Western

Kinnel says Morningstar's analysis takes into account a variety of metrics for each company: "We take data on all their individual funds and roll them up to see the big picture. All share classes are included, but we exclude funds-of-funds to avoid double counting." Also factored in is each firm's return (its five-year relative performance), its ability to retain top managers and how much of their own money managers have invested in the funds they oversee.

Focusing on companies, rather than on funds, says Kinnel, makes sense. "It tells you something about the firm's expertise, its culture and ethics; how good or bad they are at retaining talent." All that matters, he says, because, "when you buy a fund, you're getting the company -- its analysts and traders."

The metric for manager-retention, in his view, speaks volumes. "Management retention tells you a lot about a firm's culture," writes Kinnel in his report. "If those who know the company best are fleeing, you probably should not be buying." Top-rated Dodge & Cox gets high marks for manager-retention, with a five-year retention rate of over 96 percent. Its managers have an average of 21 years with the firm.

Dodge & Cox also rates highly, too, in manager investment (how much of a manager's own money is invested in his or her fund), with the average being $1,000,000, up from $860,000 in 2010. The average at BlackRock, by comparison, is a little over $76,000. More than two-thirds of BlackRock's U.S. funds, says Morningstar, have zero manager ownership. The firm placed 26th out of 30 in the overall rankings.

Copyright 2011 ABC News Radio

Saturday
Nov202010

Report: Feds Set for Multiple Insider Trading Indictments

Photo Courtesy - Getty Images(NEW YORK) -- The federal government is reportedly set to wind up a three-year insider trading investigation that could shake the investment world to its roots.

The Wall Street Journal on Saturday previewed what could be multiple charges against consultants, investment bankers, hedge fund and mutual fund traders who allegedly engaged in insider trading rings, reaping tens of millions of dollars.  Some charges could be leveled by the end of the year.

Experts are quoted as saying if the investigation is as large in scope as it appears, it could have the biggest impact of any probe of its kind in history.  It could reveal whether non-public information is routinely passed along by consultants for so-called expert networks, providing an investment edge to hedge fund managers and mutual fund traders.

Charges could be both federal and civil in nature.  The Journal says sources confirm a federal grand jury in New York has heard evidence in the matter but it is not clear what, if any, charges may follow.

Copyright 2010 ABC News Radio







ABC News Radio