RGVEX - American Funds US Government Sec R4

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American Funds US Government Sec R4 (RGVEX)
Expense Ratio: 0.64%
Expected Lifetime Fees: $19,785.83

The American Funds US Government Sec R4 fund (RGVEX) is a Intermediate Government fund started on 05/28/2002 and has $7.20 billion in assets under management. The current manager has been running American Funds US Government Sec R4 since 01/23/1987. 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 Barclays 7-10 Year Treasury (IEF)
Expense Ratio: 0.15%
Expected Lifetime Fees: $4,881.99

The iShares Barclays 7-10 Year Treasury (IEF) is an Exchange Traded Fund. It is a "basket" of securities that index the Intermediate Government investment strategy and is an alternative to a Intermediate Government mutual fund. Fees are very low compared to a comparable mutual fund like American Funds US Government Sec R4 because computers automatically manage the stocks.

The Following Intermediate Government Funds Have Lower Fees Than American Funds US Government Sec R4 (RGVEX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
American Century Ginnie Mae Instl AGMNX 130.0% 1,900 0.36%
American Century Ginnie Mae Inv BGNMX 130.0% 1,900 0.56%
American Century Government Bond Instl ABTIX 127.0% 1,600 0.28%
American Century Government Bond Inv CPTNX 127.0% 1,600 0.48%
American Funds US Government Sec A AMUSX 212.0% 7,200 0.61%
American Funds US Government Sec F-1 UGSFX 212.0% 7,200 0.63%
American Funds US Government Sec F-2 GVTFX 212.0% 7,200 0.38%
American Funds US Government Sec R5 RGVFX 212.0% 7,200 0.34%
American Funds US Government Sec R6 RGVGX 212.0% 7,200 0.29%
BlackRock GNMA Instl BGNIX 743.0% 1,300 0.62%
Columbia US Govt Mortgage Z CUGZX 465.0% 1,800 0.61%
Columbia US Treasury Index A LUTAX 106.0% 388 0.45%
Columbia US Treasury Index A LUTTZ 106.0% 388 0.45%
Columbia US Treasury Index Z IUTIX 106.0% 388 0.20%
DFA Intermediate Govt Fixed-Income I DFIGX 16.0% 2,800 0.12%
DWS GNMA Fund Institutional Class GIGGX 211.0% 2,300 0.47%
DWS GNMA S SGINX 211.0% 2,300 0.54%
DWS GNMA S SGL1Z 211.0% 2,300 0.54%
Federated Income Instl FICMX 171.0% 551 0.62%
Federated Mortgage Instl FGFIX 222.0% 299 0.39%
Federated Total Return Govt Bd Instl FTRGX 103.0% 1,300 0.31%
Fidelity Advisor Government Income I FVIIX 466.0% 5,400 0.52%
Fidelity GNMA Fund FGMNX 367.0% 10,300 0.45%
Fidelity Government Income FGOVX 466.0% 5,400 0.45%
Fidelity Intermediate Government Inc FSTGX 258.0% 1,100 0.45%
Fidelity Spartan Interm Tr Bd Idx Inv FIBIX 76.0% 1,200 0.20%
Fidelity Spartan Interm Trs Bd Idx Advtg FIBAX 76.0% 1,200 0.10%
Franklin US Government Secs Adv FUSAX 20.2% 11,600 0.58%
Goldman Sachs Government Income Instl GSGTZ 763.0% 805 0.57%
Goldman Sachs Government Income Instl GSOIX 763.0% 805 0.57%
Goldman Sachs US Mortgages Inst GSUIX 1.0% 344 0.37%
MFS Government Securities I MGSIX 49.0% 2,100 0.62%
MFS Government Securities R4 MFGJX 49.0% 2,100 0.62%
Northern Institutional US Trs Idx A BTIAX 64.5% 138 0.26%
Payden GNMA PYG1Z 23.0% 1,000 0.50%
Payden GNMA PYGNX 23.0% 1,000 0.50%
PIA MBS Bond PMTGX 122.0% 174 0.02%
PIMCO GNMA Instl PDMIX 2.0% 2,100 0.50%
PIMCO GNMA P PPGNX 2.0% 2,100 0.60%
PNC Government Mortgage I PTGIX 17.0% 104 0.63%
Putnam American Government Income Y PATYX 402.0% 756 0.60%
Putnam US Government Income Y PUSYX 496.0% 1,600 0.60%
Schwab GNMA SWGSX 641.0% 595 0.55%
Sentinel Government Securities I SIBWX 688.0% 1,000 0.57%
T. Rowe Price US Treasury Interm PRTIX 32.8% 582 0.51%
Vanguard GNMA Adm VFIJX 189.0% 39,200 0.11%
Vanguard GNMA Inv VFIIX 189.0% 39,200 0.21%
Vanguard Interm-Term Treasury Adm VFIUX 273.0% 6,500 0.10%
Vanguard Interm-Term Treasury Inv VFITX 273.0% 6,500 0.20%
Vanguard Interm-Tm Govt Bd Idx Instl VIIGX 41.0% 286 0.09%
Vanguard Intermediate-Term Government Bond Index Fund Signal Shares VSIGX 41.0% 286 0.13%
Wells Fargo Advantage Government Sec I SGVIX 268.0% 2,300 0.50%

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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.