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Beyond Gold: New Ways to Invest in Precious Metals
Tweet Share on Facebook January 13, 2010 CommentGold. Glenn Beck has sworn by it. So has radio personality Dennis Miller. Even Fred Thompson, in a way that only a U.S. senator turned Law & Order district attorney could, has stepped up to bat for it. And if you're an investor, chances are somebody you know has told you recently to buy it.
[See The Appeal of Gold ETFs.]
Despite what the potency of the modern "gold rush" might suggest, America's favorite precious metal is hardly the only one out there. On Friday, ETF Securities launched two physically backed exchange-traded funds: one for investing in platinum and the other for palladium. The company offers similar products in Europe, but Physical Platinum Shares and Physical Palladium Shares are the first of their kind in the United States.
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Sex, Drugs, and Mutual Funds
Tweet Share on Facebook January 11, 2010 Comment (1)A lawsuit filed by fund provider TCW charges that a an "erratic" and "openly confrontational" Jeffrey Gundlach—the firm's former star manager—helped steal nine million pages worth of information, lied to coworkers, and was found in possession of marijuana and pornography.
The lawsuit, which was filed last week, is TCW's boldest counterstrike to date against Gundlach, who was fired on December 4. The suit spares no details as it paints a surprising picture of Gundlach's alleged life of intricate conspiracies, surreptitious downloads, and personal vices. In doing so, it has immersed the normally buttoned-down mutual fund industry in the type of drugs, sex, and business scandal more commonly associated with tabloid fodder.
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5 Stable International Stock Funds
Tweet Share on Facebook January 7, 2010 Comment (1)International stock funds have had a strong showing in the market rebound. From December 2008 to December 2009, the returns of foreign funds have surpassed those of U.S. stock funds by almost 10 percent, and they have taken the lead in five- and 10-year trailing returns as well, according to Morningstar data. "It is an especially good time to invest overseas now that the U.S. is in a slow, potentially low-growth mode," says Morningstar senior fund analyst Kevin McDevitt. "A lot of growth in the years to come is going to be coming from overseas, most likely in emerging markets." McDevitt says investors should carve out a portion of their portfolio for international stocks to gain exposure to growth outside of the United States. And given that the health of the U.S. dollar is waning, McDevitt says international stock funds also provide currency diversification, which can help balance a portfolio.
[See the 10 Strangest Mutual Funds.]
U.S. News has compiled a list of international stock funds that offer some exposure to emerging markets and also have solid long-term performance with relatively low volatility. These five funds have passed the following screen: Each lands in the top quartile of its Morningstar category for the 10 trailing years and has a minimum investment of $10,000 or less, a below-average or low Morningstar risk rating, and a three-year standard deviation (a measure of volatility) that's below its category average.
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The Impact of Mutual Fund Fees
Tweet Share on Facebook January 6, 2010 Comment (4)Mutual fund annual fees—which include management fees, administrative costs, and marketing expenses—can really make a dent in your overall return. You may be surprised by how much. Say two people invest $10,000 in two different stock funds, which both gain an average of 8 percent per year over 10 years. Fund A charges 0.5 percent in annual fees, and Fund B charges 1.5 percent. A decade later, Fund A will deliver a return of roughly $20,530 while Fund B will return $18,560. To compare fund returns yourself, taking into account expenses, the Securities and Exchange Commission offers a mutual fund calculator on its website.
[See How the Supreme Court May Make Mutual Funds More Expensive.]
Morningstar analyst Jonathan Rahbar says that "keeping a blind eye to fees" is one of the biggest mistakes mutual fund investors make. It's important to be aware of how much you're paying in annual fees for each of your funds. Here are a few tips for keeping fees low.
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A Cyclical Decade for Mutual Funds
Tweet Share on Facebook January 6, 2010 CommentIgnore, for just a second, the recently concluded decade's two bull markets and two recessions. Forget, if even for just an instant, everything that happened throughout the course of the topsy-turvy decade we just emerged from. Because once you filter out all the noise—as preposterous of a task as that may be—something curious happens: By one measure, we're right back where we started in 2000.
[See The Decade's 10 Worst Fund Disasters.]
At the end of 1999, there were 6,702 open-ended funds (excluding money market funds) on the market, according to Morningstar. Fast-forward to the end of 2009, and—somewhat astonishingly—the number is 6,703. In other words, despite all the tumultuous ebbs and flows of the market, the net effect has been an all but invisible change in the number of funds available to the average investor.
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TCW Launches Emerging-Markets Fund
Tweet Share on Facebook January 5, 2010 CommentBeleaguered fund provider TCW announced yesterday the launch of its Emerging Markets Equities Fund. The fund's debut serves as a small reminder that even as TCW's bond operation remains in limbo after the company fired its star manager, it's business as usual for TCW's stock portfolios.
"My understanding in talking to managers on the equities side is that they haven't really been affected by the happenings going on in the bond side," says Ryan Leggio, a Morningstar analyst who covers TCW's equity funds. "From an investment research standpoint, the bond situation really hasn't had an impact on the equities as far as I can tell."
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American Funds Wins Fees Case
Tweet Share on Facebook January 5, 2010 CommentA federal judge reluctantly handed the fund industry another courtroom victory last week in a ruling that some say has cemented the need for the Securities and Exchange Commission to take a fresh look at fees.
In the case, which had dragged on since 2004, shareholders in eight mutual funds alleged that Capital Research and Management Company (CRMC) and American Funds charged them excessive investment advisory, 12b-1, and administrative services fees. CRMC is the investment adviser for the American Funds family.
