Tax-Free Trust of OR Y (ORTYX)
Expense Ratio: 0.61%
Expected Lifetime Fees: $18,917.58
The Tax-Free Trust of OR Y fund (ORTYX) is a Muni Single State Long fund started on 4/1/1996 and has $518.80 million in assets under management. The current manager has been running Tax-Free Trust of OR Y since 1/24/2011. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.
iShares S&P National Municipal Bond (MUB)
Expense Ratio: 0.25%
Expected Lifetime Fees: $8,051.41
The iShares S&P National Municipal Bond (MUB) is an Exchange Traded Fund. It is a "basket" of securities that index the Muni Single State Long investment strategy and is an alternative to a Muni Single State Long mutual fund. Fees are very low compared to a comparable mutual fund like Tax-Free Trust of OR Y because computers automatically manage the stocks.
|Mutual Fund Name||Ticker Symbol||Turnover||Assets (M)||Annual Fees|
|Fidelity Arizona Municipal Income||FSAZX||10.0%||175||0.55%|
|Franklin Arizona Tax-Free Income Fund Advisor Class||FAZZX||13.2%||1,100||0.52%|
|Franklin Missouri Tax Free Income Fund Advisor Class||FRMZX||13.1%||1,300||0.54%|
|Franklin North Carolina Tax-Free Income Fund Advisor Class||FNCZX||6.1%||1,400||0.53%|
|Franklin Oregon Tax Free Income Fund Advisor Class||FOFZX||12.5%||1,400||0.53%|
|Northern AZ Tax-Exempt||NOAZX||50.5%||115||0.45%|
|Nuveen NC Municipal Bond I||FCNRX||5.0%||438||0.59%|
|T. Rowe Price GA Tax-Free Bond||GTFBX||13.4%||216||0.55%|
|T. Rowe Price MD Tax-Free Bond||MDXBX||12.5%||2,000||0.46%|
|T. Rowe Price VA Tax-Free Bond||PRVAX||12.6%||949||0.48%|
|Vanguard FL Focused L/T Tax-Exempt Adm||VFLRX||30.0%||949||0.12%|
|Vanguard FL Focused L/T Tax-Exempt Inv||VFLTX||30.0%||949||0.20%|
|Wells Fargo Advantage CO Tax-Free Adm||NCOTX||22.0%||100||0.60%|
|Wells Fargo Advantage NC Tax-Free I||ENCYX||44.0%||142||0.54%|
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.