FINANCIAL HOUSEKEEPING | Compare and contrast mutual funds at midyear
With the year having reached its halfway point, many investors are looking to do a review of their finances to see how well their mutual funds have performed year-to-date.
The “Mutual Fund Compare” feature at Morningstar.com allows investors to look at all of their funds – plus any issues they might be considering a move into – on one screen, and makes for an easy comparison of performance, fees, rankings and more. It also gives a look at performance over short- and long-term time horizons.
You can find the fund comparison listed under “Morningstar Tools” on the Funds page at Morningstar.com.
SHORT COURSE | Market-neutral funds
Market-neutral investing is a strategy most commonly found in hedge funds, but it is increasingly available in ordinary mutual funds.
Typically, a market-neutral fund attempts to eliminate the risks of the market by holding half of its portfolio in long assets – stocks purchased and expected to rise – with the rest of its money in short positions. Short-selling involves borrowing securities from a brokerage, selling them and then repurchasing them – to return to the lender – when the price is lower; it is a bet against a security because the investor profits when the stock price falls.
Because a market-neutral fund is positioned to make money regardless of market conditions and moves, its performance depends mostly on stock-picking, rather than market trends.
