Picking Funds Is a Whole New Game
When I first started writing about mutual funds in the late 1980s, the fund business was a relatively modest affair. Back then, if you had mentioned a stock fund, there was a good chance I knew what strategy the fund used, how it had fared in recent years and possibly even the manager's name.
Believe me, those days are long gone.
Today, I regularly discover there are entire fund companies I have never before heard of. But it isn't just the proliferation of funds that has been so astonishing. Over the past 16 or 17 years, the fund business has been utterly transformed -- and that, in turn, should transform the way you pick funds.
Measuring Up
In the 1980s, fund-performance data was hard to come by. Indeed, folks would subscribe to investment newsletters, simply to get monthly updates on their funds' results.
Now, by contrast, you can get year-to-date performance in many newspapers and even more detailed information online at
www.morningstar.com, the indispensable Web site run by Chicago fund researcher Morningstar Inc. The fund results you see don't just reflect share-price changes. They also take into account fund income and capital-gains distributions.
The increasing availability of performance data has made it painfully clear just how mediocre most funds are. Result: Investors have become quicker to dump lackluster performers and shift money into better funds.
The glut of data has also spurred the growth of index funds, which seek to replicate the results of a market index by buying the stocks or bonds that constitute the index. With so many actively managed funds earning such poor returns, purchasing index funds and thereby mimicking the market has started to look awfully attractive.
Picking Your Mix
According to Morningstar, there are 6,700 stock, bond and money-market funds, up 40% from 10 years ago. With this rapid growth has come increasing specialization.
Forget vague promises that a fund will invest in U.S. stocks or in foreign shares. Today, funds tend to stick with well-defined market niches, such as midsize U.S. stocks, emerging-market debt or small foreign growth companies.
This specialization has changed the whole fund-picking process. Before, investors sought talented managers who could deliver decent returns year in and year out. Now, with funds focused on narrower market niches, investors also need to give serious thought to the market sectors they are tapping into.
The new strategy: First, decide which market sectors you want exposure to and what percentage of your portfolio you will invest in each. Next, for each sector, pick a top-notch fund to give you your desired market exposure. In effect, funds have become portfolio building blocks, rather than being viewed as stand-alone investments.
Losing Luster
As an investor, you want great performance at low cost. But fund companies have a different goal: They want to gather heaps of assets and charge fat management fees. This nasty clash of interests has become more intense in recent years -- and it exploded into public view with the 2003 and 2004 mutual-fund scandals.
Take the issue of market timing. If you are a long-term investor, you don't want market timers flitting in and out of your funds, because these traders disrupt a fund's portfolio and their quick trades may effectively steal returns that should belong to long-term holders. But unfortunately, some fund companies have welcomed timers, because these traders mean additional fund assets and hence fatter money-management fees.
Fund companies' lust for assets also underlies the sales abuses involving mutual-fund B shares. In the late 1980s, most funds either were sold through brokers and charged a large upfront commission or they were offered directly to investors without a "load," as sales commissions are known in mutual-fund lingo.
But that simple world has, I regret, disappeared. Broker-sold-fund companies have introduced a slew of new share classes, including B shares. Buyers of B shares don't fork over an initial sales commission. Instead, they pay hefty annual expenses, plus a back-end load of as much as 5% if they sell in the first six years or so.
This cost structure has led unscrupulous brokers to pitch B shares as "no-load" funds. To make matters worse, brokers often can earn larger commissions by selling B shares than by selling traditional front-end-load funds, now known as A shares.
The reason: If investors stash at least $25,000 or $50,000 at a single fund company, they often qualify for a reduced commission on A shares. That, in turn, reduces the broker's take. But B shares don't offer such "breakpoints," which is why unscrupulous brokers love to sell them.
Given that B shares are so open to abuse, why did fund companies introduce them? You guessed it: Funds want to pull in more assets, even if it means hoodwinking investors.
How can you protect yourself against all this? If you use a broker and the broker is pushing B shares, be extremely suspicious.
As an alternative, look for an adviser who will get you A shares at a discounted commission or who, in return for a quarterly asset-management fee, will help you purchase no-load funds. Better still, teach yourself to invest, so you can save money by buying no-load funds without an adviser's help.
At the same time, steer clear of fund companies that seem too anxious to haul in assets. In particular, avoid companies that advertise funds with dazzling short-term performance or that launch aggressive funds in currently hot market sectors.
Instead, aim to invest with fund companies that really seem to care about long-term shareholders. What signs should you look for? More ethical fund companies limit the number of shareholder trades, hit you with redemption fees if you sell in the first two or three months and close funds to new investors if money starts pouring in.
Sure, these restrictions are an inconvenience. But it's an inconvenience that should ultimately mean more wealth for you and other long-term holders.
挑选基金的方法今非昔比
80年代末，当我刚刚开始撰写共同基金方面的文章时，基金业务的规模并不太大。那时候，如果你提到某一种股票基金，我十有八九已经掌握该基金的投资策略，它最近几年来的表现，甚至基金经理的名字也可能说得上来。
但相信我吧，那样的日子早就一去不复返了。
如今，我时常会发现一些我闻所未闻的全新的基金公司，但让人惊讶的却不仅仅是基金数量的剧增。过去十六七年里，基金业务发生了彻底的改变，当然你在挑选基金时采用的方法也就要加以调整。
挑选符合标准的基金
80年代，基金表现方面的数据是很难获取的。的确，人们当时订阅投资简报只是为了获得他们所投资基金基业的每月最新消息。
而现在，你可以在许多报刊上获得基金每年表现状况的数据，还能在芝加哥基金研究机构Morningstar Inc.公司的网站
www.morningstar.com上获得更详细的信息，该网站的信息对投资者是必不可少的。你所看到的基金业绩不只反映了股价变动，同时还考虑到了基金利润和资本利得的分配。
在基金数据日益容易获取的情况下，大多数基金的平庸表现就让人一览无余。这所导致的结果就是，投资者会反应更快，随时抛出表现疲软的基金，而将资金投向业绩更好者。
铺天盖地的数据还推动了指数基金的增长，这类基金是按照指数的构成来买进指数成份股票或债券，因而表现与指数一致。既然有太多处于积极管理之下的基金回报状况欠佳，通过购买指数基金来紧跟市场步伐就开始变得异常诱人了。
选择理想的投资组合
Morningstar提供的数据显示，现有的股票、债券和货币市场基金总共有6,700种，较十年前上升40％。快速的增长带来的是投资专门化程度的提高。
忘掉基金将要投资美国或外国股票之类含糊其辞的承诺吧。如今的基金更多是坚守一块明确的市场，如美国中型股市场，新兴债券市场或外国小型成长型公司市场等。
这种专门化的投资方式完全改变了挑选基金的过程。以前，投资者选择那些一年到头都能带来丰厚回报的才干型投资经理；而现在，随著基金所关注市场范围的缩小，投资者也需要认真考虑他们所涉足的具体市场状况。
新型投资策略是这样的：首先确定你希望投资于哪些市场，以及这些市场在你投资组合中所占的比例。然后，针对每一个类型选择一个顶尖的基金且按照你所希望的比例买进。实际上，基金已经成了整个投资组合中的一部份，而不能被看作孤立的投资。
使投资黯然失色的违规操作
作为投资者，你希望以最低的成本获得最佳投资。但基金公司的目标则不同，他们希望把大量资产堆积在一起，从而收取丰厚的管理费用。这种使人反感的冲突最近几年愈演愈烈，并终于在2003和2004年爆发了众所周知的共同基金丑闻。
拿进入市场时机的把握来说。假如你是一名长线投资者，就不希望交易员闪电般地买进或卖出你所购买的基金，因为这些人打乱了基金的投资组合，而且他们的快速交易可能有效地窃取本应属于长线投资者的回报。但不幸的是，一些基金公司欢迎这些人，因为他们意味著更多的基金资产并能进而增加公司收取的基金管理费用。
基金公司对资产的贪得无厌也是导致利用共同基金B股销售蒙蔽投资者的潜在原因。80年代末，大多数基金或是通过经纪人出售并收取大量首期佣金，或是直接出售给投资者而不收取佣金。
但让我遗憾的是，这样的简单世界已经不复存在了。通过经纪人出售基金的公司引入了包括B股在内的大量新股票类型。B股的购买者不支付首期销售佣金，而是交纳大量年费。如果在最初六年里出售的话，还要额外支付高达5%的末期佣金。
这种成本结构导致肆无忌惮的经纪人将B股归入“无佣金”基金的类型。更糟糕的是，经纪人出售B股往往比出售传统的先行收费基金能获得更多的佣金。
造成这种现象的原因是，如果投资者在一家基金公司投入了至少2.5万或5万美元，他们通常就有资格得到A股的佣金减免待遇。这就会相应导致经纪人佣金减少。正因为B股不提供这样的“分界点”，不择手段的经纪人才对它青睐有加。
既然B股方便了惟利是图者，为什么基金公司还要引入它呢？你能猜得出，原因在于基金希望吸引更多资产，甚至不惜以蒙骗投资者为代价。
如何确保自身利益不受所有这些行为的侵害呢？如果你聘请经纪人，该经纪人向你大肆鼓吹B股时，你就要格外当心了。
另一种方案是寻找一名好顾问，要么他能以折扣佣金率向你提供A股，要么能帮助你购买无佣金基金作为你交纳季度管理费用的回报。当然，更好的办法还是自己学会投资，这样就能在没有顾问指点的情况下购买不收取佣金的基金了。
同时，要避开那些看起来急于网罗资产的基金公司。特别是要躲避那些用眩目的短期表现为基金作宣传，或是过于积极推出当前热门市场基金的公司。
相反，要关注的是那些看来为长线投资者著想的基金公司。什么迹象能说明这一点呢？更多遵纪守法的基金公司限制投资者交易的金额，如果你在最初两三个月里出售基金，就要交纳赎回费，而且当资金开始注入后，就停止向新的投资者出售该基金。
当然，这些限制会给你带来不便。但正是这些不便才是最终为你和其他长线投资者带来更大的财富的保证。
