TGBAX - Templeton Global Bond Adv

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Templeton Global Bond Adv (TGBAX)
Expense Ratio: 0.64%
Expected Lifetime Fees: $19,785.83

The Templeton Global Bond Adv fund (TGBAX) is a World Bond fund started on 12/31/1996 and has $57.50 billion in assets under management. The current manager has been running Templeton Global Bond Adv since 01/23/2001. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.

MarketRiders Prefers The Following ETF

SPDR Barclays Capital Intl Treasury Bond (BWX)
Expense Ratio: 0.52%
Expected Lifetime Fees: $16,279.01

The SPDR Barclays Capital Intl Treasury Bond (BWX) is an Exchange Traded Fund. It is a "basket" of securities that index the World Bond investment strategy and is an alternative to a World Bond mutual fund. Fees are very low compared to a comparable mutual fund like Templeton Global Bond Adv because computers automatically manage the stocks.

The Following World Bond Funds Have Lower Fees Than Templeton Global Bond Adv (TGBAX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
AllianceBern Global Bond I ANAIX 65.0% 3,300 0.58%
American Century International Bd Instl AIDIX 44.0% 1,400 0.61%
American Funds Capital World Bond F-2 BFWFX 95.0% 12,800 0.63%
American Funds Capital World Bond R5 RCWFX 95.0% 12,800 0.58%
American Funds Capital World Bond R6 RCWGX 95.0% 12,800 0.53%
DFA Five-Year Global Fixed-Income I DFGBX 67.0% 5,800 0.28%
DFA Selectively Hedged Global F/I Instl DFSHX 51.0% 796 0.19%
DFA Two-Year Global Fixed-Income I DFGFX 71.0% 4,800 0.18%
ING Global Bond I IGBIX 440.0% 681 0.61%
PIMCO Foreign Bond (Unhedged) I PFUIX 486.0% 5,000 0.50%
PIMCO Foreign Bond (Unhedged) P PFUPX 486.0% 5,000 0.60%
PIMCO Foreign Bond (USD-Hedged) I PFORX 355.0% 5,100 0.50%
PIMCO Foreign Bond (USD-Hedged) P PFBPX 355.0% 5,100 0.60%
PIMCO Global Bond (Unhedged) Instl PIGLX 267.0% 1,200 0.55%
PIMCO Global Bond (USD-Hedged) I PGBIX 348.0% 343 0.55%
T. Rowe Price Instl Intl Bond RPIIX 49.5% 143 0.55%

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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.