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Why You Should Invest in European Stocks
Tweet Share on Facebook July 27, 2010 CommentMuch has been made of the fiscal difficulties that some European Union countries, most notably Greece, are experiencing. Less has been said about what opportunities may exist for investors interested in the countries in the EU. Dean Tenerelli, manager of the T. Rowe Price European Stock fund, says that there are many cheap opportunities in Europe. As a whole, he believes Europe is inviting for investors who are willing to look past some of the macroeconomic problems there. U.S. News caught up with Tenerelli to get his outlook for the region. Excerpts:
[See U.S. News's list of The 100 Best Mutual Funds for the Long Term, and use our Mutual Fund Score to find the best investments for you.]
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The Hayward Effect: BP Shares Rally
Tweet Share on Facebook July 26, 2010 CommentWhile emotions are generally hard to qualify, investors’ disdain toward beleaguered BP CEO Tony Hayward may finally have gotten a price tag. Amid reports that Hayward will step down, BP’s stock has surged, with investors tacking roughly $5.6 billion back onto the company’s market capitalization
[See U.S. News's list of The 100 Best Mutual Funds for the Long Term, and use our Mutual Fund Score to find the best investments for you.]
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What 12b-1 Reform Means for Investors
Tweet Share on Facebook July 21, 2010 Comment (4)The Securities and Exchange Commission has voted to get rid of 12b-1 fees as they currently exist, all but capping off a prolonged campaign by investor advocates to rein in mutual funds’ annual expenses. In a unanimous vote, the SEC came out against the fees, which in 2009 drained $9.5 billion from investors’ accounts. Still, no changes will take effect until a 90-day comment period has passed and the public’s input has been evaluated.
[See U.S. News's list of The 100 Best Mutual Funds for the Long Term, and use our Mutual Fund Score to find the best investments for you.]
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The Long and Short of Managing Volatility
Tweet Share on Facebook July 19, 2010 Comment (2)As the market continues to seesaw, Americans have been pouring into investments that promise shelter and stability. One common destination of these asset flows has been long-short mutual funds. As their name implies, these funds carve out both long and short positions. Broadly speaking, they count on their longs to anchor their portfolios during strong markets and expect that their shorts will pick up the slack during rough times. As a result, while their hedges prevent them from gaining eye-popping amounts in bull markets, they generally won’t face huge losses in bear markets either. On the back of safe-haven demand, the number of long-short funds has exploded. Currently, there are 105 distinct long-short funds in Morningstar’s database, up from 61 at the end of 2006. Meanwhile, they attracted $10.5 billion in new investments last year. That dwarfs the $2.6 billion they attracted in 2007. Clearly, then, these funds have experienced an uptick in popularity. The more important question is: Do they work?
[See U.S. News's list of The 100 Best Mutual Funds for the Long Term, and use our Mutual Fund Score to find the best investments for you.]
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Next Up for the SRI Movement: Israel?
Tweet Share on Facebook July 15, 2010 Comment (11)A national group has called on TIAA-CREF to divest from a number of companies that are tied to Israel. The group, Jewish Voice for Peace, is pushing for the financial services company to blacklist companies that “profit from the violation of international law through home demolitions, the destruction of life-sustaining orchards, the construction of roads and transit that only Israelis can use, the killing of civilians by drones, and many other injustices.”
[See U.S. News's list of The 100 Best Mutual Funds for the Long Term, and use our Mutual Fund Score to find the best investments for you.]
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Wall Street Banks: Too Big to ... Invest in?
Tweet Share on Facebook July 9, 2010 Comment (1)In the aftermath of the financial sector’s implosion during the downturn, many have been quick to say that investing in large banks is almost like spinning a roulette wheel. For the Appleseed mutual fund, that simile has just taken on newfound importance. Appleseed, a top-performing fund known for its socially responsible focus, has announced that it will bar itself from investing in too big to fail banks.
[See U.S. News's list of The 100 Best Mutual Funds for the Long Term, and use our Mutual Fund Score to find the best investments for you.]
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A Good Day For Sin Stocks
Tweet Share on Facebook June 28, 2010 Comment (1)Sin stocks got a boost on Monday from a pair of Supreme Court decisions that stand to benefit the weapons and tobacco industries. In one ruling, the Court decided not to hear arguments in a major tobacco case. By doing so, the justices left in place a 2006 ruling that held that the tobacco industry defrauded the public by lying about smoking’s health impacts. While this superficially stings the tobacco industry, perhaps the bigger story is that as part of their choice to not get involved with the case, the justices rebuffed the Obama administration’s efforts to collect close to $300 billion from Big Tobacco. In a separate decision, the Court officially extended the Second Amendment to states and cities, calling the right to bear arms a “fundamental” liberty. As a result, the justices effectively gutted the Chicago handgun ban that was at the center of the case in question.
[See U.S. News's list of The 100 Best Mutual Funds for the Long Term, and use our Mutual Fund Score to find the best investments for you.]
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Just How Lucky Is Your Mutual Fund Manager?
Tweet Share on Facebook June 24, 2010 Comment (3)Before giving your successful mutual fund managers—if you have any—a pat on the back for their stock-picking acumen, consider this: According to a recent study, which will be published later this year in the Journal of Finance, luck may have a lot more to do with returns than most investors care to acknowledge. The study, conducted by Eugene Fama from the University of Chicago and Kenneth French from Dartmouth, casts serious doubt on managers’ ability to generate alpha. In the investing world, alpha is generally used to measure the extent to which active managers can generate returns beyond what would be expected from their benchmark exposures.
[See U.S. News's list of The 100 Best Mutual Funds for the Long Term, and use our Mutual Fund Score to find the best investments for you.]
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Vanguard Beefs Up Its ETF Lineup
Tweet Share on Facebook June 24, 2010 CommentVanguard has announced that it will create 19 new products, all of which will have exchange-traded fund and mutual fund share classes. The firm has also said that it will add an ETF share class to its existing S&P 500 index fund. The S&P 500 ETF will charge an expense ratio of 0.06 percent, a third of what retail investors pay for the mutual fund share class. Like Vanguard's existing ETFs, the new ones will offer commission-free trades for the firm's brokerage clients.
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Why Critics Are Still Skeptical About Target-Date Funds
Tweet Share on Facebook June 16, 2010 Comment (2)In a bid to increase transparency, the Securities and Exchange Commission has proposed modest changes to the disclosure rules governing target-date funds. Under the new proposal, providers of these popular products would be required to prominently display--both in print and online marketing materials--a table, chart or graph about each fund’s glide path. A glide path reflects how a fund’s allocation to stocks and bonds change over time. Target-date funds start with heavy allocations to stocks and gradually become more conservative. Providers would also have to explain the glide path in writing. The proposal applies to funds that have a retirement date in their name (for instance Vanguard Target Retirement 2030).
[See U.S. News's list of The 100 Best Mutual Funds for the Long Term, and use our Mutual Fund Score to find the best investments for you.]
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