| Finding the best no load mutual funds is no | | | | the most time consuming aspects of my |
| easy task because today's top funds often | | | | research is evaluating a fund's manager and |
| become tomorrow's worst performing funds and | | | | investment team. Portfolio managers should |
| vice versa. As the saying goes, "the faster | | | | have experience in a variety of different |
| they go up, the faster they come down." The | | | | market environments. The more experience, the |
| temptation for the average person to invest | | | | better, provided that the portfolio manager |
| in this year's best performing funds is | | | | is not close to retirement. In addition, the |
| almost overwhelming. Unfortunately, investors | | | | manager and his or her team should have high |
| all too often focus solely on historical | | | | quality educational backgrounds and/or |
| performance without considering how the fund | | | | well-regarded designations. It has been my |
| achieved the superior results or whether the | | | | experience that managers with better |
| results are sustainable. | | | | credentials are more successful than managers |
| | | | with lesser credentials. Further, managers |
| Mutual Fund Research | | | | with high quality backgrounds seem to have |
| | | | better mutual fund research staffs than |
| The better way to perform mutual fund | | | | lesser-qualified managers. |
| research is to focus on factors that will | | | | |
| stand the test of time such as fund expenses | | | | Investment Approach |
| as well as the experience of the fund manager | | | | |
| and the depth of his or her research team. | | | | You should also probably consider a fund's |
| Expense ratios, which are generally comprised | | | | investment style and whether it changes over |
| of an investment management fee, a 12b-1 fee | | | | time. The better funds employ very consistent |
| and other operating costs, do not typically | | | | investment approaches that rarely deviate |
| deteriorate over time. Further, expenses vary | | | | from their stated policies. At the very |
| considerably and can sometimes help explain | | | | least, if you are invested with a fund with a |
| the performance differential between the best | | | | consistent approach, you will know what to |
| no load mutual funds and the worst no load | | | | expect in both good and bad markets. |
| mutual funds over time. This is especially | | | | |
| true for fixed-income funds, where sometimes | | | | Avoid the Media Darlings and Do Your Research |
| only one or two percent separates the best | | | | |
| from the worst funds. | | | | Investors should try to avoid the |
| | | | high-flying, top performing funds that often |
| Portfolio Manager and Analyst Qualifications | | | | get quite a bit of media attention, but |
| | | | inevitably can never live up to expectations. |
| Even more important to selecting funds that | | | | Instead, investors should go the extra mile |
| will be the best performers for years to come | | | | and delve into the world of mutual fund |
| is the background and experience of the | | | | research. Mutual fund investing can prove to |
| manager and his or her investment team. As | | | | be a very lucrative endeavor, but usually |
| the publisher of a mutual fund report, one of | | | | only when you do the necessary legwork. |