HSTRX - Hussman Strategic Total Return

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Hussman Strategic Total Return (HSTRX)
Expense Ratio: 0.72%
Expected Lifetime Fees: $22,073.95

The Hussman Strategic Total Return fund (HSTRX) is a Conservative Allocation fund started on 09/12/2002 and has $2.60 billion in assets under management. The current manager has been running Hussman Strategic Total Return since 10/5/2002. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.

MarketRiders Prefers The Following ETF

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 Hussman Strategic Total Return because computers automatically manage the stocks.

The Following Conservative Allocation Funds Have Lower Fees Than Hussman Strategic Total Return (HSTRX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
American Century One Choice Vry CnsrvInv AONIX 17.0% 283 0.64%
Berwyn Income BERIX 71.0% 1,500 0.67%
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%
Manning & Napier Pro-Blend Cnsrv Term I MNCIX 25.0% 1,200 0.70%
Oppenheimer Conservative Inv Y OYCIX 12.0% 441 0.69%
Permanent Portfolio PRPFX 8.9% 17,000 0.71%
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%
Wells Fargo Advantage Divers Inc Bldr I EKSYX 65.0% 352 0.70%

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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.