MUTUAL FUNDS WEEKLY



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These money and investing stories, popular with MarketWatch readers over the past week, offer advice and insights about how to be a patient, prudent buyer who is comfortable holding stocks and other assets for the long-term — making course corrections as needed.

INVESTING NEWS & TRENDS Don’t just default to the S&P 500: Consider this simple four-fund portfolio

You’ll get the comfort of the ubiquitous index with exposure to historically higher performance

Don’t just default to the S&P 500: Consider this simple four-fund portfolio

Why this frustrated value stock pro sees shades of 1999 in the market now — and bargains in the future

Buying growth stocks at any price typically comes at a price, writes Vitaliy Katsenelson.

A former relic of the mutual fund industry is about to become exchange traded.

Fidelity filed last week to launch ETF versions of some of its mutual funds including the legendary Fidelity Magellan Fund. Once run by famed investor Peter Lynch, the Fidelity Magellan Fund was the best-performing mutual fund in the world from 1977 to 1990, raking in staggering 29% annualized returns.

That outperformance has since faded, however, and the Magellan fund’s 77-basis-point ownership fees have cannibalized its gains.

The fund has underperformed the S&P 500 significantly over the last 20 years, down 11% while the S&P is up more than 134%.

Now, the fund will enter the ETF sphere in an actively managed, nontransparent format. Unlike standard ETFs, so-called ANTs disclose their holdings quarterly instead of daily in an effort to prevent managers from getting front-run on their strategies.

“This fund’s been out there for 57 years and it’s definitely not the fund that it was when Peter Lynch was running it,” Kim Arthur, president and CEO of Main Management, told CNBC’s “ETF Edge” on Monday.

“It’s underperformed its benchmarks and … probably most of the underperformance is from the 77-basis-point fee that it charges,” he said.

While the ETF structure largely offers investors lower costs and higher tax efficiency than the mutual fund format, there’s not much else to be excited about in this transition, Arthur said.

“If they were to come out and say, ‘Hey, we’re reconstituting this and we are now going to be a thematic innovation strategy — not just growth, but we’re focusing in on where the puck’s going on innovation, on great themes,’ then you could maybe say, ‘We’re going to go ahead and give this thing a second derivative life,'” he said. 

“But to just go ahead and change the wrapper

For investors looking to park their money in the real-estate sector, mutual funds are the cheapest and most-convenient options. This category of funds also offers solid protection against inflation.

The real-estate sector recently saw tough times but the presence of this investment vehicle generally adds stability to a portfolio. This is because volatility in property prices is far less than the extent experienced by stocks. Adding such funds to a widely diversified portfolio would increase returns while significantly reducing the associated risk.

Below we share with you three top-ranked real estate mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.

TIAA-CREF Real Estate Securities Fund Retirement Class TRRSX seeks maximum total returns over the long run through growth of capital and current income. TRRSX invests a large chunk of its assets in companies primarily involved in operations related to the real estate domain. The fund may invest a maximum of 15% of its assets in securities issued by foreign entities. TRRSX has three-year annualized returns of 7.1%.

David Copp is one of the fund managers of TRRSX since 2005.

Fidelity Real Estate Investment Portfolio FRESX aims for better-than-average income and long-term capital appreciation. The fund invests the majority of its assets in companies primarily engaged in the real-estate industry and other real-estate-related investments. It mostly invests in common stocks. FRESX has returned 2.6% in the past three years.

As of the end of August 2020, FRESX held 40 issues, with 12.72% of its assets invested in Prologis Inc.

DWS RREEF Real Estate Securities Fund – Class A RRRAX seeks long-term capital growth and current income. The fund invests the majority of its assets in equity

Investors often rely on the healthcare sector to safeguard their investments. This is because demand for healthcare services does not vary much with market conditions. Also, investments in the sector provide sufficient protection to the capital invested.

Many pharmaceutical companies also offer regular dividends. Companies that consistently pay out dividends are financially stable and generate consistent cash flows, irrespective of market conditions. Mutual funds are perfect choices for investors looking to enter this sector since they possess the advantages of wide diversification and analytical insight.

As a matter of fact, the U.S. healthcare sector is anticipated to experience a major revolution in the days to come. The coronavirus pandemic is likely to shape up the future for the space.

In such circumstances, investing in healthcare mutual funds seems prudent. However, choosing the right mutual funds for your portfolio can be quite tricky. To that end, let us find out which of the two funds discussed below is better.

PGIM Jennison Health Sciences Fund- Class A PHLAX

The fund aims for long-term capital appreciation. This non-diversified fund invests majority of its assets in equity and equity-related securities of companies within the health sciences sector, such as pharmaceutical companies, biotechnology companies, medical device manufacturers, healthcare service providers and health maintenance organizations.

Further, the fund also invests in other companies that derive at least half of their revenues or profits from operations in the healthcare sector.

This Sector-Health product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the three and five-year benchmarks are 11.5% and 7.1%, respectively. To see how this fund performed compared in its category, and other #1 and #2 Ranked Mutual Funds, please click here.

PGIM Jennison Health Sciences Fund- Class A, as of the last filing, allocates its assets in the

This post was contributed by a community member. The views expressed here are the author’s own.

WEST BEND, WI (September 30, 2020) – West Bend Mutual Insurance Company, along with independent insurance agents who represent the company, key business partners, friends, and associates, recently raised $1,150,000 for the MACC Fund, Midwest Athletes Against Childhood Cancer.

Donations were raised at a September 22 event the company hosted at the West Bend Country Club, the Washington County Golf Course, and the Washington County Fair Grounds. This is the eighth time West Bend Mutual Insurance has hosted this biennial event which, to date, has generated more than $3.7 million for the MACC Fund.

West Bend Mutual Insurance President and CEO Kevin Steiner has spearheaded the event for the past 12 years. “‘WOW’ is the best way to describe what happened on Tuesday, September 22,” Kevin said. “We had a perfect weather day that set the stage for a record-breaking event. Our goal was to raise $1 million for the MACC Fund and the fight against childhood cancer. Because of the incredible generosity of our agents, business partners, associates, and friends, we exceeded our goal and donated $1,150,000 to the MACC Fund. This is an unbelievable accomplishment! Thanks to everyone who made this possible.”

“As children throughout the Midwest fight cancer and related blood disorders, it’s generous supporters like West Bend and their equally generous agents, business partners, and associates who help bring hope to these kids and their families,” said MACC Fund President and CEO Becky Pinter. “Since its inception just 44 years ago, the MACC Fund has contributed more than 70 million dollars to cancer research and has helped increase the five-year survival rate for all types of childhood cancer from 20% in 1976 to more than 80% today. We are