Invesco Short Term Bond Institutional (ISTBX)
Expense Ratio: 0.41%
Expected Lifetime Fees: $12,984.20
The Invesco Short Term Bond Institutional fund (ISTBX) is a Short-Term Bond fund started on 4/30/2004 and has $574.50 million in assets under management. The current manager has been running Invesco Short Term Bond Institutional since 2/4/2009. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.
Vanguard Short-Term Bond ETF (BSV)
Expense Ratio: 0.11%
Expected Lifetime Fees: $3,595.26
The Vanguard Short-Term Bond ETF (BSV) is an Exchange Traded Fund. It is a "basket" of securities that index the Short-Term Bond investment strategy and is an alternative to a Short-Term Bond mutual fund. Fees are very low compared to a comparable mutual fund like Invesco Short Term Bond Institutional because computers automatically manage the stocks.
|Mutual Fund Name||Ticker Symbol||Turnover||Assets (M)||Annual Fees|
|American Beacon Short-Term Bd Instl||AASBX||65.0%||184||0.38%|
|American Funds Interm Bd Fd of Amer F-2||IBAFX||80.0%||9,600||0.34%|
|American Funds Interm Bd Fd of Amer R5||RBOFX||80.0%||9,600||0.35%|
|American Funds Interm Bd Fd of Amer R6||RBOGX||80.0%||9,600||0.30%|
|American Funds ST Bd Fd of Amer F-2||SBFFX||44.0%||4,200||0.40%|
|American Funds ST Bd Fd of America R6||RMMGX||44.0%||4,200||0.36%|
|Baird Short-Term Bond Inst||BSBIX||61.1%||1,100||0.30%|
|DFA Short-Term Extended Quality Portfolio Institutional Class||DFEQX||17.0%||1,700||0.22%|
|Federated Interm Govt/Corp Instl||FGCIX||103.0%||364||0.32%|
|Federated Short-Term Income Y||FSTYX||30.0%||1,400||0.37%|
|JPMorgan Short Duration Bond R6||JSDUX||40.0%||11,300||0.31%|
|Lord Abbett Short Duration Income I||LLDYX||113.5%||20,700||0.39%|
|Metropolitan West Low Duration Bond I||MWLIX||60.0%||1,700||0.40%|
|Schwab Short-Term Bond Market||SWBDX||94.0%||377||0.29%|
|TIAA-CREF Short-Term Bond Inst||TISIX||146.0%||845||0.30%|
|Vanguard Short-Term Bond Index Inv||VBISX||67.0%||24,700||0.22%|
|Vanguard Short-Term Bond Index Signal||VBSSX||67.0%||24,700||0.11%|
|Vanguard Short-Term Investment-Grade Adm||VFSUX||47.0%||39,400||0.11%|
|Vanguard Short-Term Investment-Grade Ins||VFSIX||47.0%||39,400||0.07%|
|Vanguard Short-Term Investment-Grade Inv||VFSTX||47.0%||39,400||0.20%|
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.