Berwyn Income (BERIX)
Expense Ratio: 0.67%
Expected Lifetime Fees: $20,648.50
The Berwyn Income fund (BERIX) is a Conservative Allocation fund started on 9/3/1987 and has $1.50 billion in assets under management. The current manager has been running Berwyn Income since 1/22/2006. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.
iShares S&P Conservative Allocation (AOK)
Expense Ratio: 0.11%
Expected Lifetime Fees: $3,595.26
The iShares S&P Conservative Allocation (AOK) is an Exchange Traded Fund. It is a "basket" of securities that index the Conservative Allocation investment strategy and is an alternative to a Conservative Allocation mutual fund. Fees are very low compared to a comparable mutual fund like Berwyn Income because computers automatically manage the stocks.
|Mutual Fund Name||Ticker Symbol||Turnover||Assets (M)||Annual Fees|
|American Century One Choice Vry CnsrvInv||AONIX||17.0%||283||0.64%|
|Fidelity Advisor Asset Manager 30% I||FTINX||21.0%||349||0.64%|
|Fidelity Asset Manager 20%||FASIX||19.0%||4,400||0.56%|
|Fidelity Asset Manager 30%||FTANX||21.0%||349||0.62%|
|Fidelity Asset Manager 40%||FFANX||20.0%||309||0.65%|
|Franklin Income A||FKI1Z||35.8%||61,800||0.63%|
|Franklin Income A||FKINX||35.8%||61,800||0.63%|
|Franklin Income Adv||FRIAX||35.8%||61,800||0.48%|
|Goldman Sachs Balanced Instl||GSBIX||357.0%||121||0.65%|
|Hartford Balanced Income Fund Class I||HBLIX||29.0%||1,400||0.64%|
|T. Rowe Price Personal Strat Income||PRSIX||56.3%||989||0.64%|
|Vanguard LifeStrategy Cnsrv Gr Inv||VSCGX||46.0%||6,800||0.15%|
|Vanguard LifeStrategy Income Inv||VASIX||43.0%||2,600||0.13%|
|Vanguard Tax-Managed Balanced Adm||VTMFX||12.0%||892||0.12%|
|Vanguard Wellesley Income Adm||VWIAX||48.0%||29,300||0.18%|
|Vanguard Wellesley Income Inv||VWINX||48.0%||29,300||0.25%|
Turnover represents how much of a mutual fund's holdings are changed over the course of a year through buying and selling. Active mutual funds have an average turnover rate of about 85%, meaning that funds are turning over nearly all of their holdings every year. A high turnover means you could make lower returns because: 1) buying and selling stocks costs money through commissions and spreads and 2) the fund will distribute yearly capital gains which increases your taxes. Look for funds with turnover rates below 50%. For comparison, ETF turnover rates average around 10% or lower.
Generally, smaller funds do better than larger ones. The more assets in a mutual fund, the lower the chance that it will beat its index. Managers outperform an index by choosing stocks that are undervalued. In order to find these undervalued stocks, the manager has to know more than his competitors to develop an "edge." There are only a finite number of stocks a mutual fund manager can reasonably analyze and actively track to gain such a competitive edge. When the fund has more assets, the manager must analyze large companies because he needs to take larger positions. Large companies are more efficiently priced in the market and it becomes increasingly difficult to get an edge.