sonyaany
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 Posted: 29 Jan 2016 07:03 Post subject: pandora beads at discount |
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S All S 500 Index Mutual Funds Are Not Created Equal
NEW YORK, Oct. 30 /PRNewswire/ Investors have put billions of dollars into vehicles that seek to track the S 500 index and logic would dictate that one S 500 index fund would be just like the next S 500 index fund. Logic would be wrong.
After screening for mutual funds that seek to track the S 500 index, S Equity Research found wide variances in the performance, costs, and risks of S 500 index funds. The S 500 index funds in S mutual fund coverage universe have ranks covering the spectrum between five stars (18.8% of the 81 mutual funds in the S 500 Index Objective peer group) and one star (3.7%). The largest percentage of funds (45.7%) carried a three star rank.
S mutual fund rankings are based, in part, on the prospects for the underlying holdings, and a fund is ranked positively, compared to similar funds, if it owns stocks that are deemed as undervalued based on S STARS and if they are high quality according to other Standard Poor's proprietary analytical measures. But these inputs are of limited differentiating value when analyzing S 500 index mutual funds.
Over the past one and three year periods, the performance of the funds has varied more than one might expect. For the 12 months ended September 30, 2009, the top fund in the group, based on price change, declined 6.1%, while the worst performer dropped 9.3%. Meanwhile, the S 500 index actually Pandora Ring dropped 9.4% over the same period. In contrast, the return of the SPDR S 500 ETF (SPY $105)) declined 6.9% over the same one year period. SPY is ranked as overweight by S using a holdings based methodology that is largely consistent with S mutual fund approach. ETFs, which have become more popular in recent years, offer the benefit of low costs. Details on S Equity Research's ranking and commentary on SPY and other mutual funds and ETFs can be found on MarketScope Advisor Among the highest ranked mutual funds in the group, we highlight three five star funds: United Association S 500 Index Fund; II (UAIIX $7.80), Schwab S 500 Index Fund; Select (SWPPX $16.75), and Fidelity Spartan 500 Index Fund; Investor (FSMKX $74.25). All three funds outperformed peers over the trailing one , three , and five year periods and did so incurring a comparable amount of volatility as measured by standard deviation, with expense ratios in line with or below the larger group. Neither UAIIX nor FSMKX has a sales load, but SWPPX has a redemption fee of 2%.
"As we continued to analyze our screen's results, we come across the most telling statistic net expense ratio. Here, the range was extremely wide, especially when one considers that the funds' objectives are all the same track the S 500 Index," said Dylan Cathers, an S Equity Analyst Pandora Charms Sale Clearance who helped develop S new mutual fund ranking methodology. "The most expensive fund our screener found had an expense ratio of nearly 2.3%. That contrasts with the least expensive fund, which had a ratio of under 0.1%. When we break down these statistics further, we see that the average expense ratio for the four and five star funds was roughly 0.3%. In comparison, the net expense ratio for the SPDR S 500 ETF was slightly below 0.1%. In sharp contrast, the 17 two star funds in our screen had an average of nearly 1.3%."
After looking more closely at the three one star funds, we note that the all of them have trading histories of less than three years, for which they are penalized in our ranking methodology. Specifically, S 500 Capital Appreciation Fund; A (SSPAX $11.24) has a sales load of 5%, Wells Fargo Advantage Index Fund; A (WINAX) has a sales load of 5.75%, and Wells Fargo Advantage Index Fund; B (WINBX $38.99) had gross and net current expense ratios that were double the fund's peer averages.
"Given the differences between funds that have the same objective, mimic the performance of the S 500 index, we believe it is vital for investors to fully understand not just the relative performance of the funds they are investing in, but the risks and costs associated with those funds as well," Cathers said. "We note that investing in an ETF is certainly a valid alternative, as evidenced by SSPAX's investment philosophy it has 100% of its assets in SPDR Trust; Series 1." The inclusion of costs make matching the performance of the index a challenge. More information on Standard Poor's MarketScope Advisor is available by calling 1 877 219 1247. MarketScope Advisor is part of the Standard Poor's Equity Research Services family of products. MarketScope Advisor provides financial advisors with actionable investment intelligence on multiple asset classes including stocks, ETFs, mutual funds, variable annuities, fixed income and workflow tools that enable advisors to stay connected to the market and their investments.
About Standard Poor's Equity Research Services
As the world's largest producer of independent equity research, Standard Poor's licenses its research to over 1,000 institutions for their investors and advisors.
The equity research reports and recommendations provided by Standard Poor's Equity Research Services are performed separately from any other analytic activity of Standard Poor's. Standard Poor's Equity Research Services has no access to non public information received by other units of Standard Poor's. Standard Poor's does not trade for its own account.
Standard Poor's, a subsidiary of The McGraw Hill Companies (NYSE: MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With offices in 23 countries and markets, Standard Poor's is an essential part of the world's financial infrastructure and has played a leading role for nearly 150 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions.
For more information contact:
Marc Eiger, Communications, Tel.: 212 438 1280This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.
All information provided by Standard Poor's is impersonal and not tailored to the needs of any person, entity or group of persons. Standard Poor's is not an investment advisor and Standard Poor's and its affiliates do not sponsor, endorse, sell or promote any S index based product. Standard Poor's receives compensation in connection with licensing its indices to third parties. Indexes are unmanaged, statistical composites and their returns do not reflect payment of any sales charges or fees Pandora Charms Sale Clearance an investor would pay to purchase the securities it represents. Such costs would lower performance. It is not possible to invest directly in an index. Past performance is no indication of future results. Analytic services and products provided by Standard Poor's are the result of separate activities designed to preserve the independence and objectivity of each analytic process. Standard Poor's has established policies and procedures to maintain the confidentiality of non public information received during each analytic process. Standard Poor's and its affiliates provide a wide range of services to, or relating to, many organizations, including issuers of securities, investment advisers, broker dealers, investment banks, other financial institutions and financial intermediaries, and accordingly may receive fees or other economic benefits from those organizations, including organizations whose securities or services they may recommend, rate, include in model portfolios, evaluate or otherwise address. |
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