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Mutual Fund Families

By David Luhman on Mon, 05/11/2009 - 23:24

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


  • Good reputation in stocks
  • Reasonable fees
  • One of the smaller families


  • 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


  • 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
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