TFXIX - Transamerica Flexible Income I

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Transamerica Flexible Income I (TFXIX)
Expense Ratio: 0.69%
Expected Lifetime Fees: $21,220.52

The Transamerica Flexible Income I fund (TFXIX) is a Multisector Bond fund started on 11/30/2009 and has $278.80 million in assets under management. The current manager has been running Transamerica Flexible Income I since 04/15/2011. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.

MarketRiders Prefers The Following ETF

iShares Barclays Aggregate Bond (AGG)
Expense Ratio: 0.20%
Expected Lifetime Fees: $6,475.12

The iShares Barclays Aggregate Bond (AGG) is an Exchange Traded Fund. It is a "basket" of securities that index the Multisector Bond investment strategy and is an alternative to a Multisector Bond mutual fund. Fees are very low compared to a comparable mutual fund like Transamerica Flexible Income I because computers automatically manage the stocks.

The Following Multisector Bond Funds Have Lower Fees Than Transamerica Flexible Income I (TFXIX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
AllianceBern High Income Advisor AGDYX 29.0% 4,100 0.59%
AllianceBern High Income I AGDIX 29.0% 4,100 0.63%
Brandes Separately Managed Acct Res Tr SMARX 56.2% 145 0.00%
Franklin Strategic Income Adv FKSAX 66.8% 6,200 0.64%
JHancock Strategic Income I JSTIX 33.0% 3,300 0.52%
JHancock Strategic Income R5 JSNVX 33.0% 3,300 0.52%
Loomis Sayles Bond Instl LSB1Z 22.0% 20,800 0.63%
Loomis Sayles Bond Instl LSBDX 22.0% 20,800 0.63%
Lord Abbett Bond-Debenture I LBNYX 35.7% 8,000 0.62%
PIMCO Income Instl PIMIX 311.0% 8,900 0.40%
PIMCO Income P PONPX 311.0% 8,900 0.50%
RS Strategic Income Y RSRYX 79.0% 101 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.