Top 10 Convertible Bond Mutual Funds of 2011 Part 2

As discusses in my previous part 1 article, convertible bonds can provide additional asset diversification for long term investor and income seeker trader. There are many benefits to invest in this asset class. The rule of thumb is having 2-5% of portfolio asset in this class.

Best Convertible Bond Mutual Funds

The following is part 2 of this article, this article will list the next 5 of 10 Best convertible bonds fund of 2011. The 10 Best convertible bond funds of 2011 (Part 2):

1. Calamos Convertible A
2. Fidelity Convertible Securities
3. Vanguard Convertible Securities Inv
4. Franklin Convertible Securities A
5. MainStay Convertible B
6. Putnam Convertible Income-Growth A
7. Allianz AGIC Convertible A
8. Columbia Convertible Securities A
9. Invesco Van Kampen Harbor A
10. Lord Abbett Convertible A

Putnam Convertible Income-Growth A (PCONX)

Putnam Convertible Income-Growth investment is seeking for both current income and capital appreciation. It as well aims for conservation of capital. The major net assets investment is in convertible securities with below investment-grade rating and investment-grade rating. The maturity level of these securities is three years or longer (intermediate- to long-term stated maturities).

Robert L. Salvin has managed this convertible bond fund since Dec 30, 2005. This fund has the 1.18% of annual expense ratio.The 12b1 fee is 0.25% and its front-end sales load is 5.75%. The minimum balance to invest in brokerage account of this fund is $500 (same applies for PCNBX, PRCCX and PCNMX), there is no IRA account available. The other class tickers of this fund are PCNBX, PRCCX, PCNMX, PCVRX and PCGYX. The PCGYX fund has the lowest expense ratio in this fund (0.93%).

The top ten holdings as of February 28, 2011 are Emc Corp/Massachusetts, Safeguard Scientifics, Wells Fargo, Chesapeake Energy Corp, Citigroup, El Paso Corp, Hertz Global Holdings, Sandisk Corp, Medtronic and The Interpublic Group of Cos. The top industry sectors as of February 28, 2011 are Technology (19.00%), Financials (16.51%), Consumer Cyclicals (13.85%), Health Care (11.19%), Miscellaneous (10.45%), Communication Services (9.96%), Energy (6.79%), Capital Goods (5.36%), Basic Materials (4.97%) and Cash & Net Other Assets (1.92%).

Allianz AGIC Convertible A (ANZAX)

The investment in Allianz AGIC Convertible Fund seeks for maximum total return. It means that it is aiming for both capital appreciation and current income. The net assets investment of this fund is 80% in convertible securities of any size market capitalization and 20% in nonconvertible debt securities. The convertible securities may include debentures, corporate bonds, notes or preferred stocks and their hybrids.

Douglas G. Forsyth has managed this fund since Dec 31, 1993. This fund has no yield distributed. The expense ratio of this fund is 0.96% per year. The 12b1 fee of this fund is 0.25% with 5.50% front-end sales load. This fund has returned 7.62% over the past three years and 6.22% over the past ten years. The minimum balance to invest in this best mutual fund is $1,000. No IRA account is available.

The purchase of this fund is limited to 19 brokerages such as Scottrade Load, JPMorgan, Fidelity Retail FundsNetwork, Ameriprise Brokerage, CommonWealth Core, Raymond James, CommonWealth Universe, RBC Wealth Management-Network Eligible, TD Ameritrade Retail and DailyAccess Corporation Mid-Atlantic. The other class tickers of this fund are ANNAX, ANZCX, ANZDX, ANNPX, ANCMX and ANZRX. Some asset classes of fund have lower expense ratio fee, and no front end sales charge fee.

The top sectors of this fund as of Feb 28, 2011 are Technology (19.93%), Healthcare (14.30%), Consumer Discretionary (13.82%), Industrials (10.55%) and Financials (10.24%). The top 10 holdings of this fund are EMC Corp (1.40%), Symantec Corp (1.40%), General Motors Co (1.37%), Liberty Media (1.36%), Fifth Third Bancorp (1.31%), Archer Daniels (1.30%), Stanley Black + Decker I (1.30%), Developers Divers R (1.30%), Enersys (1.28%) and Wesco International (1.28%).

Columbia Convertible Securities A (PACIX)

Columbia Convertible Securities investment seeks for total return consistent with capital appreciation and current income. The composition of the net assets investment of this fund is (up to) 80% in below investment-grade convertible securities, (up to) 15% in Eurodollar convertible securities and (up to) 20% in foreign securities.

David L. King has managed this fund since Apr 6, 2010. This fund has 3.14% yield. The expense ratio of this fund is 1.20% per year. There is a 0.25% 12b1 fee and 5.75% front-end sales charge fee. This fund has returned 17.55% over the past one year and 3.45% over the past five years. The minimum balance to invest in the brokerage account of this fund is $2,500 (applies for other class) and $1,000 for IRA account. The other class tickers of this fund are NCVBX, PHIKX and NCIAX. Among all classes, only NCIAX doesn’t apply the 12b1 fee.

Best Convertible Securities Mutual Funds of 2012

The top holdings of this fund as of Dec 31, 2010 are Citigroup (2.8%), Invitrogen (2.5%), Gilead Sciences (2.4%), General Motors Co (2.1%), Ford Motor Company (1.9%), EMC CORP (1.7%), Micron Technology (1.5%), MGM Mirage (1.5%), Alexandria Real Estate (1.5%) and Dollar Financial Corporation (1.5%). The assets allocation of this fund is as below convertible bonds (73.3%), preferred stock (22.0%), common stock (1.0%), corporate bonds (0.5%) and cash & equivalents (3.3%).

Invesco Van Kampen Harbor A (ACHBX)

The investment in Invesco Van Kampen Harbor seeks for both current income and capital appreciation, consistent with capital preservation. This ACHBX fund invests at least 50% in convertible debt securities, up to 45% in common stocks and up to 25% in foreign securities. For the investment reason, this fund may buy and then sell certain derivative instruments (options, futures contracts and options on futures contracts).

This convertibles fund is managed by Ellen Gold since Aug 23, 2001. The yield for this fund is 3.27%. The expense ratio is 1.04% annually. The 12b1 fee is 0.25% with 5.50% front-end sales charge fee. This fund has returned 6.78% over the past three years and 4.45% over the past ten years. The minimum balance to invest in either brokerage or IRA account of this fund is $1,000. The other class tickers of this fund are ACHAX, ACHCX, ACHJX and ACHIX . The ACHIX has the highest yield among all (3.48%) with no 12b1 fee and no sales load.

The top 10 holdings of this fund as of Feb 28, 2011 are Nielsen Holdings NV, EMC Corp, SBA Communication Corp., Virgin Media Inc., Micron Technology Inc., Chesepeake Energy Corp., Endo Pharmaceut Holdings In, Ciena Corp., Symantec Corp and Alliance Data Sys Corp. The top industrial sectors are Semiconductors (5.52%), Biotechnology (4.90%), Health Care Equipment (3.96%), Pharmaceuticals (3.79%), Internet Software & Services (3.55%), Wireless Telecommunication Services (3.12%), Computer Storage and Peripherals (3.09%), System Software (2.68%), Communication Equipments (2.45%) and Health Care Services (2.32%).

Lord Abbett Convertible A (LACFX)

Lord Abbett Convertible investment seeks for both current income and capital appreciation to result in a high total return. The net assets investment composition of this fund is at least 80% of net assets in convertible securities, up to 25% in investment grade convertible securities, up to 20% in non-convertible debt or equity securities and max of 20% in foreign securities and lower-rated convertible securities.

This balanced fund has been managed by Christopher J. Towle since Jun 30, 2003. This fund has the highest yield among the other mentioned in this list (3.79%). The expense ratio of this fund is the same as the average in the category (1.41%). There is a 0.20% 12b1 fee and 2.25% front-end sales charge fee.

This convertible bond fund has returned 4.33% over the past three years and 4.32% over the past five years. The minimum balance to invest in this fund is $1,000 for brokerage account and $250 for IRA account. This fund can be purchased from 92 brokerages such as Morgan Stanley Advisors, Pershing FundCenter, Schwab Institutional, Td Ameritrade, Inc., Scottrade Load, Merrill Lynch and Edward Jones. The other class tickers of this fund are LBCFX, LACCX, LBFFX, LCFYX, LCFPX, LBCQX and LCFRX. With the minimum investment of $1,000,000, LCFYX has the highest yield in the class (4.09%).

The ten largest holdings as of Feb 28, 2011 are Affiliated Manager Group, Inc. (2.1%), Informatica Corp. (2.0%), Ford Motor Co. (1.7%), Citigroup, Inc. (1.7%), Central Euro Distribution Co. (1.7%), General Motors Co. (1.6%), Archer-Daniels-Midland Co. (1.6%), Intel Corp. (1.5%), Apache Corp. (1.5%) and Bank of America Corp. (1.4%).

Disclosure: No Position

Fund Information

No	Mutual Funds Description	Ticker	Yield	Morningstar Rating	Net Assets (Mil)	Expense Ratio	Min to Invest
6	Putnam Convertible Income-Growth A	PCONX	2.68%	3	$718	1.18%	$500
7	Allianz AGIC Convertible A	ANZAX	N/A	4	$641	0.96%	$1,000
8	Columbia Convertible Securities A	PACIX	3.14%	3	$510	1.20%	$2,500
9	Invesco Van Kampen Harbor A	ACHBX	3.27%	4	$359	1.04%	$1,000
10	Lord Abbett Convertible A	LACFX	3.79%	3	$352	1.41%	$1,000

Note: If you need to check the fund performance, please check my first article.

Best Convertible Bond Mutual Funds of 2011

There are several advantages for investors to invest in convertible securities mutual funds. One of them are getting a regular income. These posts will look into the best convertible mutual funds of 2011 including: Calamos Convertible A, Fidelity Convertible Securities, Vanguard Convertible Securities Inv, etc.

Convertibles Mutual Funds

With interest rate hikes are looming, investing in convertible bonds can be attractive to investors and/or traders. Convertible bonds can provide additional investment portfolio diversification. There are several ways to invest in convertible bonds. Investors can invest in individual convertible bonds, mutual fund, closed end fund (CEF), and exchange traded fund (ETF).

Convertible bond buyers or investors usually invest in these asset classes in the hope of obtaining one or more of the following benefits:

• Investor can participate in upside movement should the stock price increase
• Investor can limit his/ her loss should the stock price decrease
• Convertible bonds provide higher yield than regular dividend from company's common stock
• The price movement of the bond is less volatile than common stock. Convertible bonds traditionally have had a low correlation with fixed income obligations and high, but imperfect, correlation with equities / stocks
• If the company files for bankruptcy, investor can claim on the issuer's assets senior first to that of the holders of the common stock

How are the funds selected?

These funds are rated based on their asset, Morningstar rating, and expense ratio. These funds have big assets. Big asset means the fund has attracted variety of retail investor and institutional investor to invest in these funds. Most of these funds also have a respectable Morningstar rating of 3 or more stars. With 3 or more star rating, this means the fund has consistently performed under any market condition (bear or bull market) and should perform better than many of its index benchmark. These funds also paid dividend either monthly or quarterly.

The 10 Best Convertible Bonds Mutual Fund of 2011 (Part 1):

1. Calamos Convertible A
2. Fidelity Convertible Securities
3. Vanguard Convertible Securities Inv
4. Franklin Convertible Securities A
5. MainStay Convertible B
6. Putnam Convertible Income-Growth A
7. Allianz AGIC Convertible A
8. Columbia Convertible Securities A
9. Invesco Van Kampen Harbor A
10. Lord Abbett Convertible A

Calamos Convertible A (CCVIX)

The investment in Calamos Convertible fund primarily is seeking for current income while the capital growth is the secondary purpose. This fund invests the majority (around 80%) of its net assets in convertible securities issued by U.S. and foreign companies. There is no limitation of the market capitalization. The remaining assets might be invested in foreign securities. This fund will be closed to all purchases of shares and exchanges, with limited exceptions, as of January 28, 2011.

John Calamos the founder of Calamos Assets Management has managed this fund since 1985. The company is the 16th largest money manager in Chicagoland. This fund has 1.08% expense ratio per year.

The yield of this fund is 2.73%. There is 0.25% 12b1 fee and 4.75% of front-end sales load. This convertibles fund has returned 11.74% over the past one year and 5.16% over the past five years.

The minimum balance to invest in this fund is $2,500 for brokerage account (same applies for CALBX and CCVCX) and $500 for IRA account. This fund can be purchased from 89 brokerages include Schwab Institutional, TD Ameritrade, Inc., Scottrade Load, JPMorgan, Vanguard and Schwab Retail. The other class tickers of this fund are CALBX, CCVCX, CICVX and CCVRX. Eventhough CALBX and CCVCX have the same minimum initial investment, but they have higher expense ratio (1.82%) compared to CCVIX.

The top 10 holdings of this fund are EMC Corp (4.6%), SanDisk Corp (3.4%), Intel Corp (2.6%), Archer-Daniels-Midland Company (2.6%), NetApp, Inc (2.4%), Apache Corp (2.2%), Teva Pharmaceutical Industries Ltd (1.9%), Gilead Sciences Inc (1.8%), Symantec Corp (1.6%), and Navistar International Corp (1.5%). These top 10 companies make up to 24.6% of its total assets. The top sectors of this fund are Information Technology (33.8%), Health Care (15.3%), Energy (10.3%), Industrials (8.4%), Materials (7.6%), Consumer Discretionary (6.6%), Consumer Staples (5.2%) and Financials (4.3%).

Fidelity Convertible Securities (FCVSX)

Fidelity Convertible Securities investment seeks for both current income and capital appreciation. The major net assets investment of this fund is in convertible securities with below investment-grade rating or unrated securities. This best fund may also invest in corporate or U.S. government debt securities, preferred stocks, money-market instruments, and common stocks.

Thomas T. Soviero has been the lead manager since June 21, 2005. This fund has quite low annual expense ratio (0.59%) compared to the average in 1.41%. This fund has a total of $2.72 billion net assets. It doesn’t have any 12b1 fee and front-end sales load. This fund has returned 7.10% over the past five years and 6.80% over the past decade. The minimum balance to invest in this fund and the other class is $2,500 for brokerage account. You can also purchase this fund through Fidelity Advisors fund. The other class tickers of this fund are FCAVX, FCBVX, FCCVX, FICVX and FTCVX. Only FICVX doesn’t have any 12b1 fee and front-end sales load.

The top ten industry sectors of this fund as of Jan 31, 2011 are Energy (23.02%), Information Technology (17.74%), Consumer Discretionary (12.97%), Industrials (12.92%), Financials (12.89%), Health Care (6.99%), Consumer Staples (3.77%), Materials (3.45%) and Telecommunication Services (2.28%). The top ten company holdings are Peabody Energy Cv (4.75%), El Paso Corp (4.99%), Wells Fargo (7.5%), General Motors (4.75%), Ford Motor Conv (4.25%), Intel Conv (3.25%), Celanese Corp Ser A, Chesapeake Enrg Cv (2.5%), Hertz Global Conv (5.25%) and Alpha Nat Res Conv (2.375%). These top 10 holdings make up to 35.62% of the total net assets out of 132 total holdings.

Vanguard Convertible Securities Inv (VCVSX)

Vanguard Convertible Securities Investor investment is looking for both current income and long-term capital appreciation. The primary net assets investment is in convertible securities. These convertible securities have the below investment-grade rating and combine the investment characteristics of bonds and common stocks. They consist of corporate bonds and preferred stocks that are convertible into common stock.

This fund is managed by Larry Keele since Nov 1, 1996. This fund has 3.64% yield and 0.68% annual expense ratio (the lowest among all mentioned in this list). The minimum balance to invest in this fund is $10,000 for brokerage account and IRA account. This fund applies no 12b1 fee and no sales load. This fund has returned 23.85% over the past one year and 7.82% over the past ten years.

The top 10 holdings of this fund as of Feb 28, 2011 are Micron Technology Inc Cvt, SBA Communications Corp Cvt, General Motors Co Pfd, Interpublic Group of Cos Inc Cvt, Gilead Sciences Inc Cvt, MGM Resorts International Cvt, Equinix Inc Cvt, ArvinMeritor Inc Cvt, Lennar Corp Cvt and Owens-Brockway Glass Container Inc Cvt. These ten largest holdings make up to 22.5% of total net assets and 22.8% of equities.

Franklin Convertible Securities A (FISCX)

Franklin Convertible Securities investment pursues for maximizing the total investment return with considering the consistent reasonable risk. The major net assets investment is in convertible securities including the common stocks received upon conversion of convertible securities. This fund may also invest in other securities, such as common or preferred stocks and non-convertible debt securities. As of Jan 31, 2011 the composition of its net assets investment is 65.00% in convertible bonds, 29.00% in convertible preferred and 6% in cash.

Alan Muschott has managed this fund since Jul 1, 2002. He is as well the vice president of the Franklin Advisers, Inc. This fund has 1.22 billion net assets. The yield for this fund is 3.23%. This fund has 0.90% annual expense ratio which is quite low compared to the average in 1.41%. The 12b1 fee is 0.25%. This fund has returned 5.67% over the past three year, with 5.64% of 5-year average return. Minimum balance to invest in brokerage account of this fund is $1,000 and $250 for IRA account.

This fund can be purchased from 60 brokerages such as Morgan Stanley Advisors, Pershing FundCenter, Schwab Institutional, Td Ameritrade, Inc., JPMorgan and Merrill Lynch. The other class tickers of this fund are FCSZX and FROTX. The expense ratio for FCSZX is 0.65% and 1.65% for FROTX.

Best Convertible Securities Mutual Funds of 2012

Top 10 holdings of this fund as of Jan 31, 2011 are WESCO International Inc (2.90%), Microchip Technology Inc (2.30%), NetApp Inc (2.30%), Dendreon Corp (2.20%), SandRidge Energy Inc (2.10%), Salix Pharmaceuticals Ltd (2.10%), Alliance Data Systems Corp (2.10%), Apache Corp (2.00%), Micron Technology Inc (2.00%), and Citigroup Inc (2.00%). These top 10 holdings make up to 22.00% of the total portfolio. The top sectors breakdown are Information Technology (22.20%), Health Care (21.30%), Consumer Discretionary (13.60%), Industrials (9.90%), Energy (8.40%), Financials (6.40%), Materials (5.90%), Utilities (4.60%) and Consumer Staples (1.40%).

MainStay Convertible B (MCSVX)

The investment in MainStay Convertible is looking for both current income and capital appreciation. The primary net assets investment (at least 80% of total) is in investment-grade convertible securities. The other investment options include equity securities, nonconvertible corporate debt, cash or cash equivalents and U.S. government securities. This fund has a total of 1.04 billion net assets.

Edward Silverstein has been the fund manager since May 1, 2001. This fund has 1.18% yield. The expense ratio of this fund is 2.03% per year. This fund has 1.00% of 12b1 fee but no sales load. The minimum balance to invest in either brokerage or IRA account of this fund is $1,000. The other class tickers of this fund are MCOAX, MCCVX, MCNVX and MCINX. Some other class has lower expense ratio.

Top ten holdings of this fund are JPMorgan Chase & Co (3.5%), Core Laboratories LP (2.7%), Cameron International Corp (2.6%), Teva Pharmaceutical Finance Co BV (2.5%), Citigroup Inc (2.2%), Fisher Scientific International Inc (2.1%), Incyte Corp Ltd (2.0%), BioMarin Pharmaceuticals Inc (2.0%), Peabody Energy Corp (2.0%), and Allegheny Technologies Inc (1.9%). The top sectors of this fund are Consumer Non-Cyclical (24.8%), Energy (21.1%), Communications (11.0%), Technology (9.7%), Consumer Cyclical (9.7%), Industrials (6.5%), Financials (6.2%), Asset-Backed Securities (1.9%), Basic Materials (1.7%) and Utilities (0.6%).

Disclosure: No Position.

Fund Info

No	Mutual Funds Description	Ticker	Yield	Morningstar Rating	Net Assets (Mil)	Expense Ratio	Min to Invest
1	Calamos Convertible A	CCVIX	2.73%	4	$3,660	1.08%	$2,500
2	Fidelity Convertible Secs	FCVSX	2.81%	2	$2,720	0.59%	$2,500
3	Vanguard Convertible Securities Inv	VCVSX	3.64%	5	$2,130	0.68%	$10,000
4	Franklin Convertible Securities A	FISCX	3.23%	3	$1,220	0.90%	$1,000
5	MainStay Convertible B	MCSVX	1.18%	3	$1,040	2.03%	$1,000

Details on next 5 funds can be found on Top Convertible Bond Mutual Funds pt 2. The following table show the fund performance for 1 year, 3 year, 5 year, and 10 years. Please check my part 2 for the next 5 of these convertible bond funds.

updated on 4/28/2012

Dodge & Cox Income Fund (DODIX)

Kiplinger is a well known financial magazine. Any long term investor will know this magazine in a heart beat. Every year, the magazine provides a list of top 25 mutual funds which is known as Kiplinger 25 (in short Kip 25) around spring time. I’ll provide one of this best fund every couple days, I'll review the funds in details. The following article will look into the first fund, Dodge & Cox Income.

I’ll proceed from bond fund and then move to stock funds, international funds, etc. All of these funds are no load funds. This means the funds don’t charge any sales fee such as front end sales load fee or deferred sales load fee.

Dodge & Cox Income Fund (DODIX)

This Dodge & Cox Income fund (Ticker: DODIX) investment objective is to seek a high & stable rate of current income with consistent long term capital preservation. It also will try to take advantage of opportunities to realize capital appreciation. The fund invest majority of its assets in a high quality bond (i.e. investment grade bond) and other fixed income debts diversified portfolio.

These fixed income securities include U.S. Government bonds, mortgage and asset backed securities, corporate bond, collateralized mortgage bonds and other rated A or better bonds rated by credit rating agencies (Moody’s, Standard & Poor’s, Fitch, etc). This Dodge & Cox fund may invest small part of its assets (<20%) in non investment grade fixed income securities. These below investment grade bonds are known as high yield bonds or junk bonds.

DODIX Fund Facts

• Fund Inception Date: January 1989
• Ticker Symbol: DODIX
• CUSIP: 256210105
• Distribution: Dividend are paid every quarters in March, June, September, & December
• Capital gains: If any, they will be distributed in December and March
• Net Assets: $ 48.9 Billion
• Fund Manager: Dodge & Cox Management
• Beta (3yr): 0.94
• Category: Intermediate-Term Bond
• Yield: 1.28%
• Expense Fee: 0.43%
• Min to Invest: $2,500
• Capital Gains: N/A
• Turnover rate: 25%

The fund lead manager is Peter C. Lambert since 1989. The fund is also managed by variety of managers. To invest in this fund, you will need to open an account either with your brokerage or IRA account (Roth IRA, traditional IRA, and 401k).

Nuveen Quality Preferred Stock Fund (JTP)

Investing in preferred stocks can be done several different ways like individual preferred stocks, mutual funds, exchange traded funds, and closed end funds (CEFs). Investing in closed end fund (CEF) is not as popular as investing in exchange traded fund (ETF).

There are pros and cons. I may discuss in my future article. In this article, I’ll focus in investing in preferred stock CEF. One of this CEF is Nuveen Quality Preferred Income Fund (Ticker: JTP).

Nuveen Quality Preferred Income (JTP)

This Nuveen Quality Preferred Income fund objective is to provide consistent high current income and preservation of capital. It also tries to enhance portfolio value. The fund will invest majority of its assets, more than 80%, in preferred securities and <20% of its assets in debt obligations like convertible debt and convertible preferred securities. The investment assets in these securities are investment grade quality (BBB/Baa or better). This fund may use leverage to increase its income.

Since 2002, L. Phillip Jacoby and Mark A Lieb have been the lead manager of this Nuveen fund. This best preferred stock CEF has a yield of 7.82%. It consists of $537 million total common assets. The fund annual expense is 1.60% (include 1.10% management fees, 0.09% other expenses, and 0.40% interest expense). This fund has an effective leverage of 22.36% as of March 2011. The inception share price is $15.00 and the inception NAV is $14.33. The fund has paid a total of $8.52 dividend for the past 9 years.

As of February 2011, the fund consists of 170 holdings. It also has 30.9% foreign holdings. The fund top 10 holdings are Fisrtar Realty llc debt, AXA SA debt, Viacom Inc debt, Wells Fargo and Co debt, Capital One Financial debt, Kimco Realty pfd, Aegon NV preferred, Vodafone Group debt, HSBC holdings debt, and Banco Santander SA debt. The top 5 industries include insurance (31.7%), commercial banks (26.1%), real estate investment trust REIT (11.5%), media (5.7%), and capital markets (5.1%).

Why interesting?

Reasons I like this Nuveen fund are:

• This preferred stock fund has a high yield of 7.82% per year. None of this yield is part of return of capital.
• It has positive average UNII of $0.1415 per share (As of February 2011)
• The fund market price is traded below its NAV
• Reasonable expense ratio

You may also interested in these Nuveen funds

• Nuveen Quality Preferred Income Fund 2 (Ticker: JPS)
• Nuveen Quality Preferred Income Fund 3 (Ticker: JHP)

Any investments involve risk, investing in this fund may have risks such as:

• Investment and market risk
• Interest rate risk
• Call risk or prepayment risk
• Reinvestment risk
• Credit risk
• Preferred stock risk
• Leverage risk

Disclosure: No Position

Since CEFs are traded like stocks, you can buy and sell these CEFs using online stock brokerage. For cheap and great brokerages, please check my best brokerages page. update on 5/20/2012 As of May 2012, the distribution rate is 7.61% per year. This closed end fund is rated with 2 stars and neutral rating by Morningstar.

Ten Best Ranked Mid Cap Value Stock Mutual Funds 2010: Part 3

Ten best ranked mid cap value stock mutual funds 2010 - Part 3, top equity fund. This is my third article for Top Performer Mid Cap Value Mutual Fund of 2010. If you miss my previous articles, please check the following part 1 and part 2.

Mid cap value funds usually consist of companies which have capitalization between $2 billion and $10 billion. Most of these companies are based domestically in US. Some of the funds may invest in foreign stock market like Europe, Emerging Markets, Mediterranean, Pacific, Australia, Japan, etc.

Mid Cap Value Stock Mutual Funds

These funds were selected based on their rank in 2010. The fund also has a minimum net asset of $500 million and more. This may provide another boost of confident for investor to invest in this fund. The fund also has 2 stars or more Morningstar Rating.
The Ten Best Ranked Mid Cap Value Mutual Fund of 2010 (Part 3):

1. Neuberger Berman Equity Income A
2. MFS Mid Cap Value A
3. Allianz NFJ Renaissance A
4. AllianceBernstein Small-Mid Cap Value A
5. Fidelity Mid Cap Value
6. Goldman Sachs Mid Cap Value A
7. Hartford MidCap Value HLS IA
8. RidgeWorth Mid-Cap Value Equity A
9. JPMorgan Mid Cap Value A
10. Lord Abbett Mid-Cap Value A
11. The Delafield Fund
12. Vanguard Mid-Cap Value Index Inv

JPMorgan Mid Cap Value A (JAMCX)

JPMorgan Mid Cap Value fund investment pursues capital appreciation growth. This fund invests its net assets (include the borrowings for investment purposes) in equity securities of mid cap companies with market capitalizations between $1 billion and $20 billion at the time of purchase.

Since 1997, Jonathan E. Simon has managed the fund. The expense ratio of this fund is 1.23% per year. The 12b1 fee is 0.25% and the front end sales load is 5.25%. This JPMorgan fund has returned 19.47% over the past year and 8.68% over the past decade.

This minimum balance to invest in brokerage account of this fund is $1,000 (applies for JBMCX and JCMVX). No IRA account is available. This fund can be purchased from 106 brokerages include JPMorgan, Merrill Lynch, Edward Jones, Nationwide Retirement Innovator, Fidelity Retail FundsNetwork and Schwab Institutional NTF. The other class tickers of this fund are JBMCX, JCMVX, FLMVX, JMVZX and JMVSX. Some classes have lower expense ratio, such as 0.74% for FLMVX.

The top ten holdings of this fund as of February 28, 2011 are Energen Corp (2.1%), Republic Services Inc (1.9%), Loews Corp (1.8%), Devon Energy Corp (1.7%), The Gap Inc (1.7%), Fortune Brands Inc (1.6%), CMS Energy Corp (1.6%), Lincare Holdings Inc (1.6%), Ball Corp (1.5%), and Tyco Electronics Ltd (1.5%). These ten holdings make up a total of 17.0% of the portfolio.

Lord Abbett Mid-Cap Value A (LAVLX)

Lord Abbett Mid-Cap Value fund seeks to provide capital appreciation. The majority net assets investment is in equity securities of mid-sized companies. But this fund may also invest in warrants, common stocks, convertible preferred stocks and convertible bonds.

Jeff Diamond is the fund manager since June 25, 2008. This Lord Abbett fund has 1.15% annual expense ratio. The 12b1 fee of this fund is 0.35% and front end sales load of 5.75%. This fund has returned 1.54% over the past five years and 5.96% over the past ten years. The minimum initial investment for brokerage account is $1,000 and $250 for IRA account.

The other class tickers are LMCBX, LMCCX, LMCFX, LMCYX, LMCPX, LMCQX and LMCRX. LMCBX and LMCCX have the same minimum investment with LAVLX. The lowest expense ratio among the classes is LMCYX (0.8%).

As of Feb 28, 2011, the top ten largest holdings of this mid cap value fund are Interpublic Group of Co Inc (3.3%), Omnicom Group Inc (2.5%), Lazard Ltd (2.2%), El Paso Corp (2.1%), Mylan Laboratories Inc (2.0%), Bunge Ltd (2.0%), Fiserv Inc (1.9%), Weatherford International Ltd (1.8%), EQT Corp (1.7%), and City National Bank (1.5%).

The Delafield Fund (DEFIX)

As of September 28, 2009 The Delafield Fund is now part of the Tocqueville Trust. The investment in this Delafield Fund seeks long-term preservation of capital and growth of capital. The main net assets (>65%) investment is in the equity securities of undervalued domestic companies. The other assets investment is in debt securities and preferred stocks (35%) and in non-U.S. securities, including in ADRs, in both developed and emerging markets (25%).

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J. Dennis Delafield is the CFA as well as Managing Director and fund manager of this fund since November 1993. The expense ratio of this mid cap value mutual fund is 1.27%. This is a no sales load fund. It has 0.25% of 12b1 fee. This fund has returned 8.60% over the past five years and 12.36% over the past decade. The minimum balance to invest in this fund is $1,000 for brokerage account and $250 for IRA account.

The top 10 holdings of this fund as of Dec 31, 2010 are Flextronics International Ltd (3.73%), Collective Brands Inc (2.82%), Owens-Illinois Inc (2.71%), Stanley Black & Decker Inc (2.57%), Checkpoint Systems Inc (2.56%), Ingersoll-Rand PLC (2.45%), Tyco International Ltd (2.34%), Albany International Corp (2.24%), Minerals Technologies, Inc (2.22%), and FMC Corp (2.17%).

Vanguard Mid-Cap Value Index Inv (VMVIX)

Vanguard Mid-Cap Value Index Investor investment doesn’t seek for capital growth. This fund tracks the performance of a benchmark index to measures the investment return of mid-capitalization value stocks. This VMVIX fund employs a passive management approach.

This Vanguard fund is passively managed by Donald M. Butler since August 2006. The expense ratio of this fund is among the lowest of all the funds mentioned in this article (0.26%). There is no 12b1 fee as well as no sales load. This mid cap value fund has returned 26% over the past one year and 6.72% over the past three years. The minimum balance to invest in this fund for either brokerage or IRA account is $3,000. This fund can be purchased from 66 brokerages. The best way to invest in this Vanguard fund is by opening an account in Vanguard.

The top 10 holdings of this fund are Cliffs Natural Resources Inc, Dover Corp, Humana Inc, Goodrich Corp, Cooper Industries plc, Lincoln National Corp, Micron Technology Inc, Bunge Ltd, Cimarex Energy Co, and Regions Financial Corp. These ten companies make up to 9.2% of total net assets portfolio.

Disclosure: No Position

updated on 4/3/2011

Other Interesting articles:

• BBH Core Select N (BBTEX)

Best 10 Mid Cap Value Stock Mutual Funds 2010 Part 2

This is my second article of Top 12 Performer Mid Cap Value Mutual Funds of 2010. If you miss the part 1 article, you can find the part 1 here. Similar to small cap stocks, mid cap stocks have been over performing the overall market. The following is the next 4 of this top 12 list.

1. Neuberger Berman Equity Income A
2. MFS Mid Cap Value A
3. Allianz NFJ Renaissance A
4. AllianceBern Small-Mid Cap Value A
5. Fidelity Mid Cap Value
6. Goldman Sachs Mid Cap Value A
7. Hartford MidCap Value HLS IA
8. RidgeWorth Mid-Cap Value Equity A
9. JPMorgan Mid Cap Value A
10. Lord Abbett Mid-Cap Value A
11. The Delafield Fund
12. Vanguard Mid-Cap Value Index Inv

Fidelity Mid Cap Value (FSMVX)

The investment in Fidelity Mid Cap Value is seeking for capital growth in long-term period. The major net assets investment of this fund, at least 80%, is in securities of domestic and foreign companies with medium market capitalizations. The market capitalizations benchmark is similar to companies in the Russell Midcap Index or the S&P MidCap 400 Index.

Bruce Dirks is the fund manager since February 7, 2005. The expense ratio of this fund is 0.94% annually, which is quite low compared to the average expense ratio which is 1.36%. This fund has returned 5.24% over the past three years and 3.84% over the past five years. This is a no sales load fund, and as well it applies no 12b1 fee. The minimum balance to invest in this Fidelity fund for either brokerage or IRA fund is $2,500.

The top ten holdings out of the 110 total holdings of this fund as of Dec 31, 2010 are Suntrust Banks Inc., Murphy Oil Corp., Discover Fin Svcs, Regions Financial Corp., Macys Inc., Unum Group, Lincoln National Corp., Comerica Inc., Edison Intl and Ventas Inc REIT. These top 10 holdings make up to 14.62% of the portfolio.

Goldman Sachs Mid Cap Value A (GCMAX)

The Goldman Sachs Mid Cap Value fund objective is to provide long term capital appreciation. This fund invests its net assets primarily in publicly traded U.S. securities, and foreign securities. At least 80% of its net assets are invested in a diversified portfolio of equity investments in mid-cap issuers.

Dolores Bamford has managed this mid cap value stock fund since 2002. This fund has 0.25% 12b1 fee and 5.50% front-end sales load. It has 1.16% expense ratio per year.

This Goldman Sachs fund has returned 22.51% over the past 1-year and 4.04% over the past three years. The minimum balance to invest in this fund is $1,000 for brokerage account (same applied for GCMCX) and $250 for IRA account. The other class tickers of this fund are GCMBX, GCMCX, GCMTX, GSMCX, GCMRX and GSMSX. Some other class has lower expense ratio and different minimum balance investment.

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As January 2011, the top 10 holdings of this fund are Newfield Exploration Co. (2.8%), Principal Financial Group (2.1%), CBS Corp. (1.7%), Lear Corp. (1.7%), Equity Residential (1.7%), Forest Oil Corp. (1.6%), Xcel Energy Corp. (1.6%), Weatherford Intl Ltd. (1.6%), Everest Re Group Ltd. (1.6%) and The JM Smucker Co. (1.6%).

Hartford MidCap Value HLS IA (HMVIX)

Hartford MidCap Value HLS investment seeks capital appreciation in long-term period. The percentage net assets investment of this fund is 80% in mid-capitalization companies and 20% in securities of foreign issuers and non-dollar securities. The mid-capitalization companies are companies with market capitalizations within the range of the Russell Midcap and S&P 400 MidCap Indices.

This Hartford fund is managed by James N. Mordy since April 30, 2001. This fund charges an annual expense ratio of 0.85%. But this fund is now closed to new investors, you may invest either in retirement account or 401k account. This fund applies no 12b1 fee and no sales load.

This mid cap value fund is not available in IRA. It has returned 29.23% over the past one year, 7.39% over the past three years and 5.05% over the past five years. This fund can be purchased from only 7 brokerages, which are Northwestern Mutual Investor Service, Schwab RPS SDE, WR Hambrecht Co, Schwab RPS All, Matrix Financial Solutions, Trade PMR Transaction Fee and ADP Access OFA. The other class of this fund is Hartford MidCap Value HLS IB (HBMVX) with 1.1% expense ratio and 0.25% 12b1 fee.

The top 10 holdings of this fund are Arrow Electronics, Inc. (2.6%), Phh Corp. (2.4%), Virgin Media, Inc. (2.4%), Varian Semiconductor Equipment Associates Inc. (2.3%), Buck Holdings L.P. (2.1%), Delta Air Lines, Inc. (2.0%), Reinsurance Group Of America, Inc. (2.0%), Cigna Corp. (1.9%), Br Properties S.A. (1.9%) and Unum Group (1.9%). These holdings make up of 21.5% of the total net assets portfolio.

RidgeWorth Mid-Cap Value Equity A (SAMVX)

The investment in RidgeWorth Mid-Cap Value Equity mainly purpose is seeking for capital appreciation. Provides current income is the secondary purpose. The major net assets investment of this fund is in domestic equity securities of mid cap companies. The priority is at the companies with market capitalizations similar to those of companies in the Russell Mid-cap Index.

Don Wordell has managed this fund since Nov 30, 2001. The expense ratio of this RidgeWorth fund is 1.32% which is almost similar to the average in category (1.36%). The 12b1 fee for this fund is 0.30%. It has 5.75% of front end sales load. This mid cap value mutual fund has returned 21.81% over the past one year and 7.83% over the past five years. The minimum balance to invest in this fund in either brokerage or IRA account is $2,000. The other class tickers of this fund are SMFVX and SMVTX.

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Top 10 holdings of this fund are BB&T Corporation (3.1%), Northern Trust Corporation (2.9%), Intl Game Technology(2.9%), Comerica Incorporated (2.7%), Ashland Incorporated (2.6%), Hartford Financial Services Group (2.5%), MB Financial Incorporated (2.4%), Flowserve Corporation (2.3%), RR Donnelly & Sons Company (2.3%) and EOG Resources Incorporated (2.2%).

Disclosure: No Position

next: Best Mid Cap Value Mutual Fund of 2010: Part 3

Fund Information

No	Mutual Funds Description	Rank	Ticker	Yield	Morningstar Rating	Net Assets (Mil)	Expense Ratio	Min To Invest
5	Fidelity Mid Cap Value	15%	FSMVX	0.35%	2	$736	0.94%	$2,500
6	Goldman Sachs Mid Cap Value A	22%	GCMAX	0.36%	4	$8,350	1.16%	$1,000
7	Hartford MidCap Value HLS IA	25%	HMVIX	0.51%	3	$641	0.85%	$0
8	RidgeWorth Mid-Cap Value Equity A	28%	SAMVX	0.35%	4	$1,850	1.32%	$2,000

BlackRock Municipal 2018 Term Trust Fund (BPK)

BlackRock Municipal 2018 Term Trust fund (BPK) is top muni bond closed end fund. If you follow my previous blog entry, you will find the short duration closed end funds such as Nuveen Select Maturities Muni (Ticker: NIM), Nuveen Select Tax-Free Income Portfolio 3 (Ticker: NXR), etc.

This article will provide another Muni bond CEF with slightly longer average duration. This also means this fund is riskier and more volatile with interest rate hikes. This intermediate term Muni bond closed end fund is BlackRock Municipal 2018 Term Trust fund (Ticker: BPK).

BlackRock Municipal 2018 Term Trust (BPK)

The BlackRock Municipal 2018 Term Trust fund seeks tax exempt current income by investing in undervalued municipal bonds of investment grade. This BlackRock fund also will return the initial capital of USD 15 per share by 31-Dec-2018. The fund may invest some of its assets in non investment grade Muni bonds which rated as Ba/BB or B. The bond rating will be based on Moody's, S&P, Fitch rating, and BlackRock’s judgment. This BlackRock fund is managed by Jaeckel Jr (since 2006), O’Connor (since 2006), and Downs (since 2007). This fund also has total net assets of $231.6 million.

As part leverage Muni bond fund, this fund has 37.38% effective leverage. The fund charges 0.88% annual expense ratio. This annual expense includes 0.63 management fees, 0.23% other expenses and 0.01% interest expense. The fiscal year end is December 31st every year. As leveraged fund, it also has preferred shareholder distributions of 0.22%.

As of March 2011, this fund pays monthly distribution of $0.0780 per share. This means it has a yield of 6.03%. The average credit quality of this fund is A (investment grade). The average duration is 7.18 years. The average coupon is 5.10%. This BlackRock CEF consists of 107 bonds.

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As of January 2011, the fund top 5 states include Illinois (12.5%), New Jersey (10.1%), Texas (9.4%), California (8.2%), and Multi States (6.0%). The top 5 bond sectors are corporate-backed Muni’s, tax-backed, health, transportation, and housing.

As of March 30th 2011, the fund market price is traded 7.04% premium of its fund NAV. This is slightly higher than 52 weeks average of 6.92% premium. This BlackRock Municipal 2018 Term Trust fund is rated 5 stars by Morningstar. The fund market price has returned 5.94% over the past year and 5.55% over the past five years.

Disclosure: No Position