22
We are switching our yield metrics. We had been
using the trailing
12
-month distributed yield but are
now switching to the
30
-day
SEC
yield. The reason
for the switch is that the
30
-day yield is a more accu-
rate representation of a fund’s current yield. As
interest rates have fallen, the
12
-month yields tend
to be higher than
30
-day yields.
The
SEC
yield is based on a
30
-day period ending on
the last day of the previous month. It is computed by
dividing the net investment income per share earned
during the period by the maximum offering price per
share on the last day of the period. The figure listed
lags by one month. The figure is annualized.
A Madison Mosaic Sweep
We are swapping
Madison Mosaic Mid Cap
GTSGX
into the
500
and dropping
Madison Mosaic
Investors
MINVX
. The mid-cap fund had more
assets and better performance. The
4
-star mid-growth
fund has a
9
.
7%
10
-year return and a
8%
15
-year
return. Its prospectus net expense ratio is
1
.
15%
.
We are also adding Gold-rated
Manning & Napier
Pro-Blend Extended Term
MNBAX
.
Despite the rather convoluted name, the fund is
really a straightforward balanced fund. It lands in our
moderate-allocation category because it targets
a
40%
–
70%
equity weighting with the rest in bonds.
It’s run by the same team that runs all of Manning’s
funds and is a mix of U.S. stocks, foreign stocks,
and bonds.
The fund lands in the category’s top quartile for the
trailing five-,
10
-, and
15
-year periods. See the facing
page for more details.
To make room, we are cutting
Fairholme Allocation
FAAFX
, as Morningstar is dropping it from coverage.
If you have a coverage suggestion, please send it to
Find Morningstar Investor Returns
TM
on
mfi.morningstar.com
You can find a fund’s investor returns on
mfi.morning-
star.com
. They are in the FundInvestor
500
tab.
Select a category and then scroll over to the right to
see the investor returns just after the total return
percentile rank. You can use investor returns as a
gauge of whether investors made the most of the
fund or suffered poor timing.
For example, if I rank based on
10
-year investor
returns in the mid-growth category, I see that
Royce
Premier Investment
RYPRX
had the top
10
-year
investor return with
11
.
5%
annualized.
Columbia
Acorn
ACRNX
was next with
11
.
1%
, and then
West-
port
WPFRX
with
10
.
7%
annualized. At the bottom
is
Rainier Small/Mid Cap Equity
RIMSX
with a
3%
annualized investor return despite a
10
.
8%
total
return. Clearly, Rainier shareholders’ timing was poor.
In diversified emerging markets,
American Funds
New World
NEWFX
boasts the highest investor
returns despite having the lowest total returns. Why?
It has a much lower-risk, steadier format than its
peers. That stability keeps shareholders in during the
rough patches that come regularly in emerging
markets.
œ
Summary of Changes
Add
Drop
Madison Mosaic Mid Cap
Madison Mosaic Investors
Manning & Napier Pro-Blend
Fairholme Allocation
Ratings Changes
New Rating Old Rating
Artisan Small Cap Investor
• ´
Artio International Equity
‰ ´
T. Rowe Price Health Sciences
‰ Œ
We Are Switching to 30-Day SEC Yield
Changes to the 500
|
Russel Kinnel
What is Morningstar
FundInvestor
500
?
The Morningstar FundInvestor
500
features the industry’s
best and most notable funds.
Use the list to get new
investment ideas and track
the funds you already own.
FundInvestor
subscribers have
access to one-page monthly
reports on all 500 funds on
mfi.morningstar.com. Just type
in the name or ticker of the
fund in the search box.
