SHTIX - Invesco Limited Maturity Treasury A2

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Invesco Limited Maturity Treasury A2 (SHTIX)
Expense Ratio: 0.62%
Expected Lifetime Fees: $19,207.62

The Invesco Limited Maturity Treasury A2 fund (SHTIX) is a Short Government fund started on 12/15/1987 and has $124.60 million in assets under management. The current manager has been running Invesco Limited Maturity Treasury A2 since 02/4/2009. The fund is rated by Morningstar. In addition to trading fees and broker commissions, this fund has 12b-1 fees of 0.15%

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 Invesco Limited Maturity Treasury A2 because computers automatically manage the stocks.

The Following Short Government Funds Have Lower Fees Than Invesco Limited Maturity Treasury A2 (SHTIX). 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%
American Century Short-Term Govt Inv TWUSX 139.0% 806 0.56%
BNY Mellon Short-Term US Govt Secs M MPSUX 143.7% 276 0.52%
Davis Government Bond Y DGVYX 27.0% 162 0.60%
DFA Short-Term Government I DFFGX 64.0% 1,500 0.20%
Federated US Govt 1-3 Yr Instl FSGVX 171.0% 449 0.47%
Federated US Govt 1-3 Yr Y FSGTX 171.0% 449 0.30%
Federated US Govt 2-5 Yr Instl FIGTX 153.0% 775 0.59%
Fidelity Instl Shrt-Interm Govt FFXSX 315.0% 503 0.45%
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%
Franklin Adjustable US Govt Secs Adv FAUZX 19.7% 2,500 0.61%
Goldman Sachs Short Dur Govt Instl GSTGX 359.0% 2,100 0.50%
Invesco Limited Maturity Treasury Y LMTYX 138.0% 125 0.47%
JPMorgan Treasury & Agency Select OGTFX 35.0% 370 0.45%
Loomis Sayles Ltd Term Govt and Agency Y NELYX 66.0% 591 0.60%
Northern Short-Intermediate US Govt NSIUX 1.0% 287 0.43%
Oppenheimer Limited-Term Government Y OLTYX 87.0% 1,800 0.49%
Thornburg Limited-Term US Govt I LTUIX 14.6% 426 0.57%
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 Adm MNSGX 485.0% 1,600 0.61%
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.