Western Asset Emerging Markets Debt I (SEMDX)
Expense Ratio: 0.95%
Expected Lifetime Fees: $28,436.39
The Western Asset Emerging Markets Debt I fund (SEMDX) is a Emerging Markets Bond fund started on 10/17/1996 and has $398.60 million in assets under management. The current manager has been running Western Asset Emerging Markets Debt I since 4/23/2006. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.
iShares JPMorgan USD Emerg Markets Bond (EMB)
Expense Ratio: 0.60%
Expected Lifetime Fees: $18,626.92
The iShares JPMorgan USD Emerg Markets Bond (EMB) is an Exchange Traded Fund. It is a "basket" of securities that index the Emerging Markets Bond investment strategy and is an alternative to a Emerging Markets Bond mutual fund. Fees are very low compared to a comparable mutual fund like Western Asset Emerging Markets Debt I because computers automatically manage the stocks.
|Mutual Fund Name||Ticker Symbol||Turnover||Assets (M)||Annual Fees|
|Fidelity Advisor Emerging Markets Inc I||FMKIX||133.0%||1,400||0.90%|
|Fidelity New Markets Income||FNMIX||132.0%||5,200||0.87%|
|Goldman Sachs Emerging Market Debt I||GSDIX||86.0%||1,300||0.88%|
|Goldman Sachs Local Emerg Mkts Debt Inst||GIMDX||183.0%||1,700||0.91%|
|MFS Emerging Markets Debt I||MEDIX||80.0%||4,900||0.88%|
|MFS Emerging Markets Debt R4||MEDGX||80.0%||4,900||0.88%|
|Payden Emerging Markets Bond||PYE1Z||85.0%||824||0.85%|
|Payden Emerging Markets Bond||PYEMX||85.0%||824||0.85%|
|PIMCO Emerging Local Bond Instl||PELBX||22.0%||12,000||0.90%|
|PIMCO Emerging Markets Bond Instl||PEBIX||12.0%||6,500||0.83%|
|PIMCO Emerging Markets Bond P||PEMPX||12.0%||6,500||0.93%|
|Stone Harbor Emerging Mkts Debt Instl||SHMDX||82.0%||1,100||0.76%|
|T. Rowe Price Emerging Markets Bond||PREMX||50.1%||3,300||0.94%|
|T. Rowe Price Instl Emerging Mkts Bond||TREBX||49.9%||233||0.70%|
|TCW Emerging Markets Income I||TGEIX||137.9%||3,800||0.87%|
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.