OGTFX - JPMorgan Treasury & Agency Select

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JPMorgan Treasury & Agency Select (OGTFX)
Expense Ratio: 0.45%
Expected Lifetime Fees: $14,191.30

The JPMorgan Treasury & Agency Select fund (OGTFX) is a Short Government fund started on 01/20/1997 and has $369.90 million in assets under management. The current manager has been running JPMorgan Treasury & Agency Select since 02/11/1997. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.

MarketRiders Prefers The Following ETF

iShares Barclays Short Treasury Bond (SHV)
Expense Ratio: 0.14%
Expected Lifetime Fees: $4,561.33

The iShares Barclays Short Treasury Bond (SHV) is an Exchange Traded Fund. It is a "basket" of securities that index the Short Government investment strategy and is an alternative to a Short Government mutual fund. Fees are very low compared to a comparable mutual fund like JPMorgan Treasury & Agency Select because computers automatically manage the stocks.

The Following Short Government Funds Have Lower Fees Than JPMorgan Treasury & Agency Select (OGTFX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
American Century Short-Term Govt Instl TWUOX 139.0% 806 0.36%
DFA Short-Term Government I DFFGX 64.0% 1,500 0.20%
Federated US Govt 1-3 Yr Y FSGTX 171.0% 449 0.30%
Fidelity Spartan S/T Tr Bd Idx Fid Advt FSBAX 57.0% 780 0.10%
Fidelity Spartan S/T Tr Bd Idx Inv FSBIX 57.0% 780 0.20%
Northern Short-Intermediate US Govt NSIUX 1.0% 287 0.43%
Vanguard Short-Term Federal Adm VSGDX 411.0% 5,800 0.10%
Vanguard Short-Term Federal Inv VSGBX 411.0% 5,800 0.20%
Vanguard Short-Term Govt Bd Idx Signal VSBSX 69.0% 237 0.14%
Vanguard Short-Term Treasury Adm VFIRX 302.0% 6,400 0.10%
Vanguard Short-Term Treasury Inv VFISX 302.0% 6,400 0.20%
Wells Fargo Advantage Sh Dur Govt Bd I WSGIX 485.0% 1,600 0.43%

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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.