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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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Schwab Ups the Ante in ETF Pricing Battle
Tweet Share on Facebook June 14, 2010 CommentCharles Schwab has fired off the latest volley in the exchange-traded fund pricing war. The giant brokerage firm has reduced the expense ratios on six of its eight ETFs in a bid to attract more clients and to undercut the competition. “The battle for ETF custody and ETF sales is really starting to heat up,” says Tom Lydon, the editor of ETF Trends.
[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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Is Bernanke's Optimism Contagious?
Tweet Share on Facebook June 9, 2010 Comment (2)Federal Reserve Chairman Ben Bernanke, testifying on Wednesday in front of the House Budget Committee, offered an upbeat assessment of the U.S. economy’s ability to weather the debt crisis that’s brewing in the euro zone. “The actions taken by European leaders represent a firm commitment to resolve the prevailing stresses and restore market confidence and stability,” he said. “If markets continue to stabilize, then the effects of the crisis on economic growth in the United States seem likely to be modest.”
[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 Biggest Losers: Mutual Funds That Fell Flat in May
Tweet Share on Facebook June 8, 2010 Comment (1)Late last year, Jay Chitnis, a comanager of the YieldQuest Core Equity Fund, predicted that the high-flying stock market would soon take a hit. “In the fourth quarter of 2009, we said that in 2010, there will be a correction that will make the hair on the back of your neck stand up,” he says. By the time the S&P 500 had sunk down into the low 1100s last month, though, Chitnis thought the correction had run its course. “We felt that it was time to move to a much more aggressive risk posture in the fund based on a number of factors lining up,” he says. When stocks’ tailspin continued, YieldQuest Core Equity fell hard. After the dust from May had cleared, the fund had lost upwards of 13 percent in just 31 days, making it one of the month’s biggest losers.
[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 Outlook for Oil Companies in the Gulf
Tweet Share on Facebook June 2, 2010 Comment (4)In the wake of the explosion aboard BP’s Deepwater Horizon rig in the Gulf of Mexico, President Obama has promised to pursue tougher regulations for the oil industry. Last week, he announced a far-reaching moratorium on offshore drilling that will affect operations from the Gulf all the way to the Arctic Ocean. BP’s future is certainly unclear: The company’s stock has plummeted from about $60 to just below $37 since the explosion that created the leak on April 20. BP has lost $75 billion in market value since the spill, according to the Associated Press. For insight into what this government intervention means for the oil industry, U.S. News spoke with Tim Parker, an analyst a T. Rowe Price who will become the manger of T. Rowe Price’s New Era fund at the end of June. (The fund’s current manager, Charles M. Ober, is retiring later this year after managing the fund since 1997.)
[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.]
