Morningstar Recommends Sell on Four Mutual Funds
May 17, 2004
The director of research at Morningstar has advised investors to sell four mutual funds in a recent "Fund Spy" column.
Saying that informed fund selling and buying decisions start with information like year-to-date performance and analyzing expense ratios, Russell Kinnel, director of research at Morningstar, said the Gabelli ABC, Phoenix-Engemann Balanced Return, ING Emerging Countries and Strong Balanced funds should be given the "heave ho."
Another factor in Kinnel's decision was whether funds are sticking with their original strategies. "Say you own a fund for its small-cap exposure, and it's your only small-cap fund," he wrote. "If it moves most of its assets to mid caps, you should consider selling or adding a true small-cap fund so that you won't lose that exposure."
As far as returns go, he suggested that if a peek at three- and five-year numbers shows low returns, the investor should look into the fund's strategy.
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