WASAX - Ivy Asset Strategy A

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Ivy Asset Strategy A (WASAX)
Expense Ratio: 0.99%
Expected Lifetime Fees: $29,510.90

The Ivy Asset Strategy A fund (WASAX) is a World Allocation fund started on 7/10/2000 and has $24.40 billion in assets under management. The current manager has been running Ivy Asset Strategy A since 1/24/1997. The fund is rated by Morningstar. In addition to trading fees and broker commissions, this fund has 12b-1 fees of 0.25%

MarketRiders Prefers The Following ETF

Vanguard Total World Stock Index ETF (VT)
Expense Ratio: 0.22%
Expected Lifetime Fees: $7,107.65

The Vanguard Total World Stock Index ETF (VT) is an Exchange Traded Fund. It is a "basket" of securities that index the World Allocation investment strategy and is an alternative to a World Allocation mutual fund. Fees are very low compared to a comparable mutual fund like Ivy Asset Strategy A because computers automatically manage the stocks.

The Following World Allocation Funds Have Lower Fees Than Ivy Asset Strategy A (WASAX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
AllianceBernstein Real Asset Strategy Fund Advisor Class AMTYX 120.0% 354 0.75%
American Funds Capital Inc Bldr A CAIBX 47.0% 73,800 0.61%
American Funds Capital Inc Bldr F-1 CIBFX 47.0% 73,800 0.65%
American Funds Capital Inc Bldr F-2 CAIFX 47.0% 73,800 0.41%
American Funds Capital Inc Bldr R3 RIRCX 47.0% 73,800 0.97%
American Funds Capital Inc Bldr R4 RIREX 47.0% 73,800 0.66%
American Funds Capital Inc Bldr R5 RIRFX 47.0% 73,800 0.37%
American Funds Capital Inc Bldr R6 RIRGX 47.0% 73,800 0.32%
BlackRock Global Allocation Instl MALOX 31.0% 51,700 0.89%
DWS Global Income Builder A KTR1Z 137.0% 984 0.96%
DWS Global Income Builder A KTRAX 137.0% 984 0.96%
DWS Global Income Builder S KTRSX 137.0% 984 0.76%
First Eagle Global I SGIIX 11.6% 33,000 0.88%
Goldman Sachs Growth & Inc Strat Inst GOIIX 35.0% 1,100 0.95%
Goldman Sachs Growth Strat Instl GGSIX 35.0% 897 0.94%
Hartford Global All-Asset Fund Class I HLAIX 206.0% 806 0.93%
Hartford Global All-Asset Fund Class R5 HLATX 206.0% 806 0.93%
Hartford Global Real Asset Fund Class Y HRLYX 145.0% 369 0.95%
Ivy Asset Strategy I IVAEX 47.0% 24,400 0.77%
MassMutual Select BlackRock Glbl Allc S MGSSX 43.0% 522 0.87%
Morgan Stanley Global Strategist A SRTAX 123.0% 444 0.98%
Morgan Stanley Global Strategist I SRTDX 123.0% 444 0.73%
PIMCO All Asset Fund Institutional Class PAAIX 56.0% 27,300 0.89%
Templeton Global Balanced Adv TZINX 19.0% 998 0.96%
The Hartford Global All-Asset Fund Class Y HLAYX 206.0% 806 0.88%
Thornburg Investment Income Builder I TIBIX 30.3% 10,700 0.87%
UBS Global Allocation Y BPGLX 68.0% 867 0.98%
Waddell & Reed Asset Strategy Y WYASX 72.0% 2,800 0.84%

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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.