DRNYX - Dreyfus NY Tax-Exempt Bond

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Dreyfus NY Tax-Exempt Bond (DRNYX)
Expense Ratio: 0.74%
Expected Lifetime Fees: $22,639.84

The Dreyfus NY Tax-Exempt Bond fund (DRNYX) is a Muni New York Long fund started on 07/26/1983 and has $1.40 billion in assets under management. The current manager has been running Dreyfus NY Tax-Exempt Bond since 12/30/2009. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.

MarketRiders Prefers The Following ETF

SPDR Barclays Capital New York Muni Bond (INY)
Expense Ratio: 0.20%
Expected Lifetime Fees: $6,475.12

The SPDR Barclays Capital New York Muni Bond (INY) is an Exchange Traded Fund. It is a "basket" of securities that index the Muni New York Long investment strategy and is an alternative to a Muni New York Long mutual fund. Fees are very low compared to a comparable mutual fund like Dreyfus NY Tax-Exempt Bond because computers automatically manage the stocks.

The Following Muni New York Long Funds Have Lower Fees Than Dreyfus NY Tax-Exempt Bond (DRNYX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
BlackRock NY Municipal Bond Instl MANKX 17.0% 270 0.72%
DWS New York Tax-Free Income S SNW1Z 28.0% 362 0.70%
DWS New York Tax-Free Income S SNWYX 28.0% 362 0.70%
Fidelity Advisor NY Municipal Inc I FEMIX 11.0% 2,000 0.53%
Fidelity Advisor NY Municipal Inc T FNYPX 11.0% 2,000 0.73%
Fidelity New York Municipal Income FTFMX 11.0% 2,000 0.47%
Franklin NY Tax-Free Income A FNYSZ 6.7% 6,800 0.60%
Franklin NY Tax-Free Income A FNYTX 6.7% 6,800 0.60%
Franklin NY Tax-Free Income Adv FNYAX 6.7% 6,800 0.50%
Invesco Van Kampen NY Tax Free Inc A VNYAX 18.0% 170 0.66%
Legg Mason WA New York Municipals A SBNCZ 8.0% 1,100 0.71%
Legg Mason WA New York Municipals I SNPYX 8.0% 1,100 0.56%
Nuveen NY Municipal Bond I NTNYX 16.0% 744 0.61%
Oppenheimer AMT-Free New York Municipals Fund Class Y ONYYX 21.0% 1,300 0.64%
PIMCO NY Municipal Instl PNYIX 26.0% 163 0.45%
Rochester Municipals A RMU3Z 11.0% 8,000 0.69%
Rochester Municipals A RMUNX 11.0% 8,000 0.69%
Rochester Municipals Y RMUYX 11.0% 8,000 0.56%
T. Rowe Price NY Tax-Free Bond PRNYX 13.4% 409 0.51%
Vanguard NY Long-Term Tax-Exempt Adm VNYUX 22.0% 3,300 0.12%
Vanguard NY Long-Term Tax-Exempt Inv VNYTX 22.0% 3,300 0.20%

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Why Are These Metrics Important?

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.