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Mutual Fund Families
Mutual Fund Families
Fidelity - the industry leader
Vanguard - the low-cost leader
American - the largest provider of load funds
Brokerage house funds
Other noteworthy no-load families
No-load fund super markets
Fidelity - the industry leader
By far the largest mutual fund provider
Almost twice as large as number two Vanguard
Has enormous variety of funds
Provides both load and no-load funds
Most funds available through 401(k) or 403(b) savings plans are offered without loads
Fidelity Advisor Funds are sold through brokers with a fairly high load of around 5 percent
Ongoing management expenses are reasonable
Fidelity has fairly aggressive investment style
Often compares its funds with inappropriate indexes to make fund appear better than it really is
Quite good in domestic equities, average in international equities and bonds
Bottom line : You could do worse than to invest with Fidelity
Vanguard - the low-cost leader
Second largest provider of mutual funds
Has very low expenses
All funds are strictly no-load
Has reputation as a conservative institution
Very good for bond funds and stock index funds
Average performer in aggressive stock funds
Bottom line : You should definately look into what Vanguard offers
American - the largest provider of load funds
Offers only load funds through brokers and other advisors
Loads are fairly stiff - generally above 5 percent
Ongoing management expenses are reasonable
Has fairly good performance in stock funds
Bottom line : If you want to use a commission-based advisor, you might want to look into American funds
Brokerage house funds
Funds from the following full-service brokerages generally have high loads and high ongoing management expenses with mediocre performance
- Dean Witter
- Merrill Lynch
- Oppenheimer
- Prudential
- Dean Witter
These brokerage houses may also charge a high wrap or advisory fee of up to 3 percent of assets
This fee is rarely worth the price
Consider paying a simple hourly fee if you think you need advice selecting funds
Other noteworthy no-load families
Janus
- Good reputation in stocks
- Reasonable fees
- One of the smaller families
Scudder
- One of the smaller families
- Good range of offerings in foreign stocks
T. Rowe Price
- Offers a number of good stock funds
- One of the best providers of international stock funds
- Ongoing expenses are fairly low
USAA
- Associated with very reputable insurance company
- Fairly conservative investment style
No-load fund super markets
Offer one-stop shopping for variety of no-load funds from smaller providers like Berger and Janus and even large families like Fidelity
Offer convenience because holdings are consolidated into one account statement
Able to leverage your shares in a margin account (see "Stock Investing for Everyone")
This increases upside and downside potential for gains
Either pay a small transaction fee when buying or selling, or avoid all transaction fees by buying "no transaction fee" funds
There's no free lunch, and "no transaction fee" funds usually charge higher ongoing expenses than comparable funds
Larger providers of no-load fund super markets
- Charles Schwab
- Fidelity Brokerage
- Jack White & Company