JCBAX - JPMorgan CA Tax Free Bond A

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JPMorgan CA Tax Free Bond A (JCBAX)
Expense Ratio: 0.62%
Expected Lifetime Fees: $19,207.62

The JPMorgan CA Tax Free Bond A fund (JCBAX) is a Muni California Intermediate fund started on 9/10/2001 and has $390.30 million in assets under management. The current manager has been running JPMorgan CA Tax Free Bond A since 5/22/2005. The fund is rated by Morningstar. In addition to trading fees and broker commissions, this fund has 12b-1 fees of 0.25%

MarketRiders Prefers The Following ETF

iShares S&P California Municipal Bond (CMF)
Expense Ratio: 0.25%
Expected Lifetime Fees: $8,051.41

The iShares S&P California Municipal Bond (CMF) is an Exchange Traded Fund. It is a "basket" of securities that index the Muni California Intermediate investment strategy and is an alternative to a Muni California Intermediate mutual fund. Fees are very low compared to a comparable mutual fund like JPMorgan CA Tax Free Bond A because computers automatically manage the stocks.

The Following Muni California Intermediate Funds Have Lower Fees Than JPMorgan CA Tax Free Bond A (JCBAX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
American Century CA Interm-T T-Fr Bd Ins BCTIX 49.0% 1,100 0.28%
American Century CA Interm-T T-Fr Bd Inv BCI1Z 49.0% 1,100 0.48%
American Century CA Interm-T T-Fr Bd Inv BCITX 49.0% 1,100 0.48%
Columbia CA Intermediate Muni Bond Z NCM2Z 9.0% 278 0.48%
Columbia CA Intermediate Muni Bond Z NCMAX 9.0% 278 0.48%
Franklin CA Interm-Term Tx-Fr Inc Adv FRCZX 9.4% 1,100 0.54%
HighMark CA Interm Tx-Fr Bond Fid HMITX 32.0% 252 0.54%
JPMorgan CA Tax Free Bond Instl JPICX 7.0% 390 0.52%
JPMorgan CA Tax Free Bond Sel JPCBX 7.0% 390 0.57%
Legg Mason WA Interm Maturity CA Muni I SICYX 5.0% 196 0.60%
Northern CA Intermediate Tax-Exempt NCITX 53.2% 332 0.45%
Oppenheimer Limited Term California Municipal Fund Class Y OLCYX 32.0% 452 0.61%
PIMCO CA Intermediate Muni Bd Instl PCIMX 32.0% 136 0.45%
Schwab CA Tax-Free Bond SWCAX 68.0% 423 0.49%
SEI Tax-Exempt CA Municipal Bond A SBDAX 12.0% 173 0.60%
Vanguard CA Interm-Term Tax-Exempt Adm VCADX 13.0% 6,200 0.12%
Vanguard CA Interm-Term Tax-Exempt Inv VCAIX 13.0% 6,200 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.