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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.]
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Why Investors Are Pouring Into Alternative Investments
Tweet Share on Facebook May 27, 2010 CommentA recent report shows that investors are clamoring for more options for their portfolios. In 2009, investors poured approximately $75 billion into alternative-style mutual funds and exchange-traded funds in the U.S., according to a report released by asset manager SEI and research firm Strategic Insight. The largest inflows were seen in long/short, market-neutral, commodity, and currency funds.
"Alternative strategies have the prospect of offering non-correlated returns to diversify some of the risks that investors see in their portfolio of traditional long-only products," says Ben Alpert, hedge fund analyst with Morningstar. "That's why you see the trend of why they're going in that direction."
[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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Will Investors Keep Shunning the Market?
Tweet Share on Facebook May 19, 2010 CommentThe flash crash has claimed another victim: mutual funds’ pristine inflow streak. During the week that started May 6, the same day as the market’s 1,000-point intraday plunge, investors yanked a net total of $14 billion out of long-term mutual funds, the Investment Company Institute reported on Wednesday. The last time that mutual funds had net weekly outflows was in March 2009.
[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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How to Avoid Portfolio Overlap
Tweet Share on Facebook May 19, 2010 Comment (1)For many investors, diversification is a brute-force activity: By the sheer size of their portfolios, they look to insulate themselves from risk. In many cases, though, they’re inadvertently magnifying their potential for losses. That’s because without proper care, a seemingly diversified portfolio can become quite entangled.
[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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3 Winners From the Flash Crash
Tweet Share on Facebook May 18, 2010 CommentDuring this month’s flash crash, which saw the Dow briefly plummet by roughly 1,000 points, most asset classes took sharp hits. And in the ensuing panic, the stock market seemed dangerously close to flying off its hinges. But before writing off the entire event as an unmitigated disaster, consider how the market’s tailspin affected these three types of investments:
[See U.S. News's list of the Best Mutual Funds for 2010, and use our Mutual Fund Score to find the best investments for you.]
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5 Overpriced Mutual Funds
Tweet Share on Facebook May 14, 2010 CommentHow much is too much? That’s the question at the center of a highly contentious debate over mutual fund fees. And, except in extreme cases (for instance, the recently liquidated Frontier Microcap Fund’s expense ratio at one point reached a mindboggling 18 percent, cementing its reputation as the mascot for absurdly high fees), the answer is far from clear.
[Use the U.S. News Mutual Fund Score and the rankings of trusted fund analysts to find the best mutual funds for you.]
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New Mutual Fund Will Focus on Africa
Tweet Share on Facebook May 5, 2010 Comment (1)As a broadening debt crisis draws the financial community’s attention to the euro zone, money manager Larry Seruma has quietly been looking toward an entirely different corner of the global economy. With little fanfare, Seruma’s firm, Nile Capital Management, has launched the first-ever actively managed, U.S.-based mutual fund to focus exclusively on Africa. The fund will invest in African stock markets and in companies that, while based in other continents, get a significant portion of their revenues from Africa.
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