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The Mutual Fund Series: Fidelity Investments

May 15th, 2008 at 07:51 pm

During each part of this weekly series, I will be looking at a specific mutual fund company.

Today's company is Fidelity Investments.



Fidelity Investments is a very large full-service investment company. They manage over three hundred mutual funds and offer a variety of services. Some of the services they provide include retirement plan management and discount brokerage services.

What I Like About Fidelity Investments
* Options. Lots of them. With over three hundred mutual fund options, I can be certain that I can always find a fund that suits my investment goals.
* Target Retirement Funds. Along with Vanguard, Fidelity is a leading provider of target retirement funds. They call their target retirement funds "Freedom Funds". Target retirement funds are mutual funds that have a set retirement year attached to them. As the targeted retirement year approaches, the fund portfolio will be automatically shifted toward a more conservative mix. This is a really nice feature for those people who do not want to actively manage their retirement savings.
* Full-service Investment Company. I like companies that are well-rounded and can meet all of my personal investment needs.
* On-Line Capability. I have a 401(k) from a previous employer that I have left with Fidelity. I have left it with Fidelity for a variety of reasons, but one reason is that I really like their on-line capabilities. With a single click, I can see the total value of my investments, the individual return of each mutual fund, and the year-to-date performance of my overall portfolio. I like that (but only when it tells me double-digit POSITIVE growth!).

What I Would Like To See Improved At Fidelity Investments
* Lower "initial investment required". Most of Fidelity's funds require an initial investment of $2,500. This really blocks out beginning investors. This requirement is usually removed when investing in mutual funds via a company 401(k), 403(b), or other retirement plan. However, there are a lot of people who do not have access to such a company retirement plan, and it would be very helpful if Fidelity lowered the initial investment required to $250 (like American Funds).

Fidelity Investment Mutual Funds That I Own
* ZERO.

Fidelity Investment Mutual Funds That I Am Considering Purchasing
* Fidelity Magellan Fund [Ticker: FMAGX] It has been around since 1963, has generated a 18.09% average annual return, and has a lower expense ratio (0.54%).

What Fidelity Mutual Funds do you own?

Read about the other mutual fund companies reviewed as part of the Mutual Fund Series HERE.

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The Mutual Fund Series: American Funds

April 27th, 2008 at 09:26 pm

The is the latest installment in the weekly series - The Mutual Fund Series.

During each part of this weekly series, I will be looking at a specific mutual fund company.

Today's company is American Funds.



American Funds has been around since 1931 and is one of the largest mutual fund companies in the world with over $900 Billion in investments and over 40,000,000 shareholder accounts. American Funds is owned by a larger company - The Capital Group Companies.

What I Like About American Funds
* Great performance long-term. The track record of American Funds has been terrific!
* Long-Term Approach. They use a team-approach to manage their mutual funds. They manage money extremely well in down markets. They have absorbed hits like the 1987 crash and the bear market of the early 70s and have performed well.
* Experience. Their advisors have an average of 22 years of experience with American Funds. That is unheard of in today's world!
* Low Initial Investment Requirement. Most American Fund mutual fund investments can be started with just $250 and a commitment to invest at least $25/month. That is great! It allows anyone to start investing!
* Low Expense Ratios. They have low expense ratios when compared to most mutual funds. They are higher than Vanguard, but are about half of comparable mutual funds.
* Tools. They have a nice retirement planning website HERE. I really like their "quick analysis" retirement planning calculator HERE. It told me good news - that they believe I can retire someday! What does it tell you? You can also check out my "retirement nest-egg required" calculator (located HERE).

What I Would Like To See Improved At American Funds
* Sales Charges. To purchase American Funds directly, one has to be savvy with on-line trading websites or else one will have to work through an advisor. This means that there will be a "load" when one purchases American Fund mutual funds through a broker. If one is just starting out, it could mean that one will have to pay up to 5.75% for all new money invested. This load drops as more money is held in one's account, but the lower charges start after one achieves six figures in their account.

American Fund Mutual Funds I Own
I currently own six American Fund mutual funds.

* AMCAP Fund A [Ticker: AMCPX]
* Capital World Growth and Income Fund [Ticker: CWGIX]
* Fundamental Investors A [Ticker: ANCFX]
* New World Fund [Ticker: NEWFX]
* The Growth Fund of America [Ticker: AGTHX]
* The Investment Company of America [Ticker: AIVSX]

American Fund Mutual Funds That I Am Considering Purchasing
* The New Economy Fund [Ticker: ANEFX] I like the growth potential of the markets this fund will be investing in.
* EuroPacific Growth Fund [Ticker: AEPGX] Same as The New Economy Fund - I really like the potential of the markets this fund will be investing in.

What American Fund mutual funds do you own? Do you have any American Fund mutual funds that you really like? Any you really dislike?

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The Mutual Fund Series: Vanguard

April 16th, 2008 at 02:41 pm

During each part of this weekly series, I will be looking at a specific mutual fund company.

Today's company is The Vanguard Group.

Vanguard is one of the largest mutual fund companies in the world. Based in Valley Forge, Pennsylvania, they currently manage $1.3 TRILLION dollars for their clients and offer 150 domestic funds and additional funds in international markets.

What I Like About Vanguard

* Target Retirement Funds. Vanguard was one of the first companies to offer target retirement funds. It is a fantastic idea to address the complete confusion that some people feel when making retirement mutual fund choices. All one has to do is select their target retirement date and Vanguard will automatically shift the mutual fund to become less risky/volatile as one approaches retirement. It really helps address the need to rebalance one's portfolio.
* Very low annual expense ratios. Vanguard is client-owned. This means that the company is owned by those who invest with the company. This results in Vanguard having the lowest management costs in the mutual fund industry. The average expense ratio for their mutual funds is 0.20% (the industry averages around 1.50%). This means that I get to keep more of the annual growth of my money.
* Lots of mutual fund options. With over 150 domestic funds and additional funds in the international markets, I have a lot of choice. I like choices.
* Full-service investment company. Vanguard offers mutual funds, IRAs, Roth IRAs, 401(k) rollovers, 529s, ESAs, and brokerage services.

What I Would Like To See Improved At Vanguard
* Lower "initial investment requirement". Most of Vanguard's funds require an initial investment of at least $3,000. This rules out a lot of beginning investors. Of course, this is not a problem when someone is investing within the bounds of their company 401(k), 403(b), or other retirement plan where minimum investment requirements are usually removed.

Vanguard Mutual Funds I Own
* I currently own one Vanguard mutual fund - Vanguard Institutional Index Fund [Ticker: VINIX]. I own this mutual fund as part of a 401(k). You can see other mutual funds that I currently own by clicking HERE.
* This mutual fund has a minimum investment requirement of $5,000,000. The reason that I am able to own shares of this mutual fund is because it is offered as part of the company 401(k) plan.
* It is a large-cap blend fund.

Vanguard Mutual Funds That I Am Considering Purchasing
* Vanguard Target Retirement 2040 Fund [Ticker: VFORX] This fund will automatically rebalance for me as I approach retirement. I chose the 2040 fund because that is a target retirement year for me. Vanguard has Target Retirement funds for every five year period from year 2005 to 2050.
* Vanguard 500 Index Fund Investor Shares [Ticker: VFINX] This fund tracks the performance of the S&P 500. It has very low expense ratios. It does need $3,000 to begin an individual investment.

What Vanguard funds do you own? Do you have any Vanguard funds that you really like? Dislike?

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