Open-Ended, No-Load Mutual Fund Companies essay

Introduction

The main objective of every business-person anywhere in the world focuses on maximizing the profits or incomes. Likewise, in the field of investment that offers two alternatives either through personal direct investment or collective investment, a wise investor would definitely spend a time in analyzing the most suitable and profitable mutual fund company before he or she finally settles on the preferred choice. The most appropriate and effective selection criterion is used which include the study of family of funds, risks and other relevant information using investment strategies (Robert 48). In this research work, I am intending to choose the best open-ended, no-load mutual fund company for investment; the first activity will be to identify three performing companies from which, after thorough study and investment analysis, I will select the best.

The mutual fund companies identified include Vanguard, T. Rowe Price and Federated Investors. These are competitive companies with exemplary performance; however, their benefits differ by a substantial margin and one need to go further in determining the best by considering their terms each at a time. The performance of these companies is as discussed below.  

Vanguard

Bond funds

The ticker VWAHX (High Tax Exempt) of asset type bond-long-term National municipal shows an expense ratio of 0.2% and YTD of 1.66% A. The annual returns for this ticker as of April 30th 2013 are approximately 6.88%. Again, considering Inflation protected securities, ticker VIPSX, and bond-inter-term investment asset has 0.10% expense ratio, -0.41% on YTD and the annual returns is 4.37%. Total bond market admiral shares indicate an expense ratio of 0.10% and annual returns of 3.58%

Stock funds

In Growth and income, ticker VQNPX, Large-cap growth, demonstrate an expense ratio of 0.36% and annual returns of 16.78% in 2013. Mid-cap growth, VMGRX has an annual return of 10.91% whereas Total stock market index admiral shares reflect a 14.32% in by end of April in the same year.

Balanced funds

Ticker VASIX, life strategy income, reveals 6.13% of annual returns as of April 30th 2013.

T. Rowe Price

Bond funds

GA Tax-free bond, ticker GTFBX, has a daily YTD of 1.29%, annual returns of 5.52% and an expense ratio of 0.56% as of 7th May 2013. On the High yield given by ticker PRHTX, the daily YTD is 6.87% with an annual return of 14.42 as of 05/07/2013, its expense ratio in that period is 0.75%

Stock funds

On capital opportunity, ticker PRCOX shows a daily YTD of 14.59%, annual returns of 16.18% and expense ratio of 0.75% as of 05/07/2013. The Div mid-cap growth, ticker PRDMX has, as of 5/7/2013, a daily YTD of 14.21%, annual returns of 12.91% and expense ratio of 0.97%.

Money market funds

Considering summit cash reserves ( TSCXX), the expense ratio is 0.45%, annual returns amount to 0.01% and has a daily YTD of 0.00% as of 05/07/2013.

Federated Investors

Portfolio Turnover

The funds are used to pay for transaction costs, for instance commissions, when they buy and sell securities. High portfolio turnover indicates higher transaction costs and consequently higher taxes. In the recent fiscal year the turnover portfolio reached a 139% in average.

In corporate Bond of Federated investors one may have a primary investment of up to 35% during high yield. The average high yield is 2%.

They experiences risks such as stock market risks where the value of equity securities in the fund’s portfolio tend to fluctuate thus leading to sudden or gradual decline in the price of funds.

From the above feasible analysis, the Vanguard’s merits by far outweigh the other two and therefore, it is the best mutual company that one should invest. It has lower risks rates as compared to the other two since it is well established with many years of experience in this field and has more distributed mutual funds. Moreover, it has higher lower average expense ratio of less than 0.2%. In addition, its past activities are commendable with higher anticipation of future growth.

In Vanguard Company, will select the stock fund, because from past performance it has reflected higher annual returns than the other two products. It also has lower expense ratio and risks and its prospectus portfolio is high.

Conclusion

The best company to invest basing on the investment strategies will be the one that offers the best terms with lower risks and uncertainty (Robert 67). Furthermore it should have excellent past and present performance and shows high chances of future growth. Vanguard company, therefore, becomes the ultimate choice as it has most of these qualities.

Open-Ended, No-Load Mutual Fund Companies essay

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