What criteria do you use to select Mutual Finds? I think Morningstar is pretty clear that star ratings are scorecards, while medals are buy recommendations. Neutral and negative seem to be hold and sell recommendations, respectively. So I wouldn't try to map star ratings into buy/sell/hold. An analyst (medal) rating can turn on a dime (e.g. if a manager leaves), while a star rating is unaffected by recent changes.
"[Star ratings are] strictly a historical, backward-looking measure of risk-adjusted performance. In contrast, the Morningstar Analyst Ratings are are a qualitative, analyst-driven rating based on what we feel investors could expect from a fund's performance going forward"
http://beta.morningstar.com/videos/591905/What-Are-Morningstar-Medalist-Funds.htmlFWIW, I find the star ratings to be a good roll-up of past performance, while I view the analyst ratings as a beauty contest. M* has what seems to me a well earned reputation of doting too long on certain funds.
Regarding RPHYX, I think saying that it's been mischaracterized is a bit harsh. It is, if not a unique fund, a very unusual one with no (or few) good peers with which to compare. You can't rate a fund that's in a class by itself, so it winds up in a class with only distantly related funds.
Great Owls
uses Morningstar categories, so it evidences some of the same category distortions. (I like comparing M* and Lipper scoring because Lipper tends to have more focused categories, though its downside is that this can result in small numbers of peer funds.)
best unknown Mr. Snowball gave us SFGIX. Any other suggestions on the best up and coming equity or balanced mutual fund that nobody yet knows about?
As far as up and coming equity funds, so far I like ARRFX. Other under the radar funds I like are AGLOX, PGFIX, VETAX, UBVAX (closed). 2 of these are focused funds, so they might not be for everybody. I am of the philosophy that if one wants to buy an actively managed domestic large cap fund (that is not themed based such a dividend or sector fund), invest in a focused fund. Otherwise, invest in an S&P
500 index fund. I use an S&P
500 index fund as my core stock fund, and generally buy focused funds for satellite large cap exposure.
best unknown Both VFINX (S&P500) and VDIGX are actually categorized by Morningstar as Large Blend but my point was that if you are buying VDIGX for dividend growth it is no better than VFINX which contains a lot of non dividend payers, so as you may not get the downside protection you are looking for in VDIGX as its yields shrinks in this bull market.
I personally don't buy funds that have to fit into numerous sectors b/c it forces you to occasionally buy bad funds in bad sectors. My investment philosophy is built around VBINX as the 65-75% of the assets (which contains all sectors) and then adding the best managers available in small allocations. Hence, the reason for the discussion topic. Thanks for the VDIGX idea.
What criteria do you use to select Mutual Finds? @MSF - Understood. So at M* would 3-stars constitute the "hold" opinion / 4&
5 the "buy" / and 1&2 the "sell"?
While we're on the subject, RPHYX seems to be all over the place. MFO puts it in the
Great Owl category. M* gives it 3 (
hold I presume). Lipper's ratings are scattered by attribute, but generally average around 3. MaxFunds gives it only 60 on a 100 point scale - but than classifies it "fair" That 60 looks to me like maybe Ol Max isn't quite sure whether it's a sell or a hold. (However, that might constitute a 4th opinion.) And Fund Mojo apparently hasn't yet formulated an opinion.
I've followed the discussions on RPHYX and am aware that much of the divergence of opinion relates to the catagorization (or rather
miscategorization) of that fund.
Added: Can't quite get my head around the idea that there can only be 3 possible opinions expressed about a fund. There's so many things observers can evaluate beyond a simple
buy, sell, hold proclamation. Are the fees appropriate? What category does the fund belong in (G&I, Balanced, Moderate Allocation, etc). How flexible are the fiduciary's exchange privileges? What are the best/worst case scenarios under bull/bear market conditions? Seems to me a prudent investor would want to seek out viewpoints on all of these before adding a fund to his portfolio.
The Closing Bell: Stocks Mixed Ahead Of Apple Earnings, Fed Decision
What criteria do you use to select Mutual Finds? Unlike the proverbial <fill in ethnic group here> where three people will give rise to five opinions, here there are only three options: buy, hold, and sell. So five sources can have at most three opinions, not the other way around.
That said, AEPGX should do as an example fund. Morningstar might be considered of two minds on the fund - rating it (retrospectively) at 2 stars, but giving it an analyst (prospective) rating of gold.
Lipper rates it at 4-
5 (except on preservation, at 3). Likewise, S&P rates it 4 stars out of five. I believe both of these are retrospective, so these ratings would best be compared with the M* 2 star rating.
Looking at prospective ratings, Zacks rates this 3 (hold), while The Street rates this D (sell). There you have it, buy (M*), hold (Zacks), sell (The Street).
US News, ever trying to be all things to all people, averages all of this and comes up with an insightful
5.9 on a scale of ten.
http://money.usnews.com/funds/mutual-funds/foreign-large-growth/american-funds-europacific-growth-fund®/aepgx
What criteria do you use to select Mutual Finds? @davidmoranLooks like we both started investing around 1971 (4
5 years ago). Mine was a 403B plan with a 4.17% front load invested in TEMWX. A great fund back than. I knew even less of investing than than I know today. But the fund prospered over the 1
5-20 years I owned it. Probably shouldn't have left Templeton, but a lot of friction developed between the "advisor" and me when I started investing on my own with T. Rowe Price - especially when I transferred some of the $$ out of Templeton on my own. (Pretty sure he was collecting some type of back load).
While I loath front-loads and the commission-based reps who peddle them, I benefitted greatly from his experience. In particular, I became more acclimated to taking a degree of risk in pursuit of a higher return than what I observe in many first-time investors who don't have the benefit of an advisor. So, the load may have been worth it.
I don't have time to look up all 7,000+ funds available to U.S. investors at
5 different sites search of that
one on which they all disagree. But it's out there somewhere. :)
Good luck.
What criteria do you use to select Mutual Finds? >> I love it when five different sources give me five different views of a fund.
I have actually never seen this, in 45y. Example? I guess it depends on what 'different' means.
>> I'd worry if all five agreed
I the opposite --- would be a useful data point. Do you worry that everyone on Earth loves a given Vanguard this or that?
-
In that case, davidmoran,
you need read only one or two trusted sources and purchase whatever fund(s) score highest on their scale. Sounds simple enough. You are indeed fortunate.
Just remember - When
everyone agrees that
you should buy a fund, that means every Tom, Dick & Harry logging into those sites is getting the same feedback. Money rushes in. At some future point a lot of that money rushes out. Might not be harmful for an index fund or ETF, but floods of money running in and out can be damaging to a managed fund.
Do as you will. I'm not an expert, nor do I wish to offer others investing advice. I'm not qualified to do so. As I read the initial question, it sought out the things we as individual investors deemed important in selecting our funds. Nothing more.
Mutual fund expense
What criteria do you use to select Mutual Finds? >> I love it when five different sources give me five different views of a fund.
I have actually never seen this, in 45y. Example? I guess it depends on what 'different' means.
>> I'd worry if all five agreed
I the opposite --- would be a useful data point. Do you worry that everyone on Earth loves a given Vanguard this or that?
best unknown Yes, I agree. I like VDIGX also. Interesting that Fidelity shows VFINX (S&P 500) has the same dividend yield as VDIGX when VDIGX's purpose is to target dividend growers. RIMHX looks good short and long....it has a better 10 year return than VBINX (60/40 index) at present. Still researching.
What Happens When Management Changes http://fpafunds.com/docs/fund-announcements/2015-11-16-sor_press-release-final.pdf?sfvrsn=4@BenWP Yup, graph out 1-yr returns and it kinda slaps ya in the face, doesn't it? Shades of FPA Perennial. Just a month respite, after butchering their shareholders on that one, Eric Ende said he'd had enough and was heading for the retirement hills, looks like they rolled up their sleeves and got to work on SOR. (see p.2 of above doc for what was intended by the Board of Directors when they authorized the share buyback; your hunch is correct)
AMG SouthernSun Global Opportunities Fund in registration
MLPs Are Rallying—But They're Still Risky @heezsafe,
Thanks so much for those eye-opening articles. I had no idea. Right now I am definitely leaning toward EMLP, which does not appear to have the same tax issues as AMLP. Simon Lack has a nice mutual fund -- MLXIX -- but I cannot buy it at Wellstrade.
CHART Kevin
