Oppenheimer Discovery Y (ODIYX)
Expense Ratio: 0.86%
Expected Lifetime Fees: $25,984.37
The Oppenheimer Discovery Y fund (ODIYX) is a Small Growth fund started on 6/1/1994 and has $1.40 billion in assets under management. The current manager has been running Oppenheimer Discovery Y since 7/23/2006. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.
Vanguard Small Cap Growth ETF (VBK)
Expense Ratio: 0.10%
Expected Lifetime Fees: $3,271.86
The Vanguard Small Cap Growth ETF (VBK) is an Exchange Traded Fund. It is a "basket" of securities that index the Small Growth investment strategy and is an alternative to a Small Growth mutual fund. Fees are very low compared to a comparable mutual fund like Oppenheimer Discovery Y because computers automatically manage the stocks.
|Mutual Fund Name||Ticker Symbol||Turnover||Assets (M)||Annual Fees|
|AQR Small Cap Momentum Fund Class L||ASMOX||121.0%||119||0.66%|
|BlackRock Small Cap Growth Equity Instl||PSGIX||141.0%||1,300||0.80%|
|Eagle Small Cap Growth I||HSIIX||36.0%||2,400||0.82%|
|Eagle Small Cap Growth R5||HSRSX||36.0%||2,400||0.85%|
|Harbor Small Cap Growth Instl||HASGX||77.0%||475||0.85%|
|Hartford Small Company HLS IA||HIASX||99.0%||1,300||0.71%|
|Hartford SmallCap Growth HLS IA||HISCX||62.0%||514||0.67%|
|Invesco Small Cap Growth I||GTSVX||38.0%||1,700||0.83%|
|Janus Triton Fund Class I||JSMGX||42.0%||3,000||0.76%|
|Legg Mason ClearBridge Small Cap Gr I||SBPYX||24.0%||842||0.85%|
|Lord Abbett Developing Growth I||LADYX||137.0%||2,300||0.74%|
|Northern Small Cap Core||NSGRX||12.3%||166||0.75%|
|Pioneer Growth Opportunities Y||GROYX||112.0%||538||0.75%|
|Prudential Jennison Small Company Fund Class Q||PJSQX||44.0%||2,700||0.72%|
|Sentinel Small Company I||SIGWX||37.0%||2,300||0.68%|
|T. Rowe Price New Horizons||PRNHX||43.7%||9,000||0.81%|
|Vanguard Explorer Adm||VEXRX||89.0%||8,900||0.34%|
|Vanguard Explorer Inv||VEXPX||89.0%||8,900||0.50%|
|Vanguard Small Cap Growth Index Instl||VSGIX||40.0%||8,500||0.08%|
|Vanguard Small Cap Growth Index Inv||VISGX||40.0%||8,500||0.24%|
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.