MFS Total Return I (MTRIX)
Expense Ratio: 0.52%
Expected Lifetime Fees: $16,279.01
The MFS Total Return I fund (MTRIX) is a Moderate Allocation fund started on 01/2/1997 and has $5.70 billion in assets under management. The current manager has been running MFS Total Return I since 11/21/2005. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.
iShares S&P Moderate Allocation (AOM)
Expense Ratio: 0.11%
Expected Lifetime Fees: $3,595.26
The iShares S&P Moderate Allocation (AOM) is an Exchange Traded Fund. It is a "basket" of securities that index the Moderate Allocation investment strategy and is an alternative to a Moderate Allocation mutual fund. Fees are very low compared to a comparable mutual fund like MFS Total Return I because computers automatically manage the stocks.
|Mutual Fund Name||Ticker Symbol||Turnover||Assets (M)||Annual Fees|
|American Beacon Balanced AMR||AABNX||47.0%||974||0.34%|
|American Funds American Balanced F-2||AMBFX||47.0%||51,300||0.40%|
|American Funds American Balanced R5||RLBFX||47.0%||51,300||0.35%|
|American Funds American Balanced R6||RLBGX||47.0%||51,300||0.30%|
|American Funds Inc Fund of Amer F-2||AMEFX||38.0%||69,200||0.40%|
|American Funds Inc Fund of Amer R5||RIDFX||38.0%||69,200||0.36%|
|American Funds Inc Fund of Amer R6||RIDGX||38.0%||69,200||0.31%|
|GE Instl Strategic Investment Inv||GSIVX||187.0%||690||0.37%|
|TIAA-CREF Managed Allc Inst||TIMIX||10.0%||562||0.42%|
|Vanguard Balanced Index Instl||VBAIX||67.0%||15,900||0.08%|
|Vanguard Balanced Index Inv||VBINX||67.0%||15,900||0.24%|
|Vanguard Balanced Index Signal||VBASX||67.0%||15,900||0.10%|
|Vanguard LifeStrategy Moderate Gr Inv||VSMGX||32.0%||8,200||0.16%|
|Vanguard STAR Inv||VGSTX||24.0%||14,000||0.34%|
|Vanguard Wellington Adm||VWENX||38.0%||59,300||0.19%|
|Vanguard Wellington Inv||VWELX||38.0%||59,300||0.27%|
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.