UMBWX - Scout International

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Scout International (UMBWX)
Expense Ratio: 0.94%
Expected Lifetime Fees: $28,166.30

The Scout International fund (UMBWX) is a Foreign Large Growth fund started on 09/14/1993 and has $7.20 billion in assets under management. The current manager has been running Scout International since 05/9/2012. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.

MarketRiders Prefers The Following ETF

iShares MSCI EAFE Growth Index (EFG)
Expense Ratio: 0.40%
Expected Lifetime Fees: $12,680.81

The iShares MSCI EAFE Growth Index (EFG) is an Exchange Traded Fund. It is a "basket" of securities that index the Foreign Large Growth investment strategy and is an alternative to a Foreign Large Growth mutual fund. Fees are very low compared to a comparable mutual fund like Scout International because computers automatically manage the stocks.

The Following Foreign Large Growth Funds Have Lower Fees Than Scout International (UMBWX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
AllianceBern Intl Growth I AWPIX 67.0% 795 0.90%
Dreyfus International Stock I DISRX 5.1% 1,500 0.93%
Fidelity Advisor Canada I FICCX 104.0% 3,400 0.82%
Fidelity Canada FICDX 104.0% 3,400 0.82%
Hansberger International Growth Inst HITGX 62.0% 535 0.86%
Harbor International Growth Instl HAIGX 112.0% 1,200 0.87%
Harding Loevner International Eq Instl HLMIX 15.0% 1,600 0.86%
Janus Overseas Fund Class I JIGFX 32.0% 7,100 0.76%
MFS Instl International Equity MIEIX 29.0% 3,000 0.75%
Oppenheimer International Growth Y OIGYX 19.0% 5,700 0.87%
T. Rowe Price International Stock Fd PRITX 43.0% 7,800 0.85%
Thornburg International Value I TGVIX 20.8% 26,000 0.88%
Vanguard International Growth Adm VWILX 43.0% 15,600 0.34%
Vanguard International Growth Inv VWIGX 43.0% 15,600 0.47%

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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.