IT'S TOUGHER TO FIND NO-LOAD FUNDS
- Alan Lavine and Gail Liberman
Another no-load mutual fund group bites the dust.
The Invesco Funds, the Denver-based investment company, announced that starting March 1, you can only buy its funds through financial advisers and financial planners.
This means you're forced to pay commissions.
The change follows in the footsteps of the Scudder Group of Funds and Mutual Series Group of Funds--both no-load fund families that changed to funds with loads or commissions.
This is bad news for do-it-yourself investors who buy funds directly or through mutual fund supermarkets like Charles Schwab and Fidelity. Invesco's Dynamics Fund has be a solid performer for years. The fund group's Financial Services and Heath Sciences and Leisure sector funds also carry high ratings from Morningstar Inc., Chicago.
Ray Cunningham, Invesco's chairman, says the company made the change because most of the fund's sales already have been coming from financial advisers. Advisers charge a fee for managing investors' mutual fund assets.
"This confirms a trend going on for the last couple of years," Cunningham says. "Upward of 80 percent of mutual fund transactions involve some sort of intermediary."
That's the spin. But The Wall Street Journal data show that assets managed by Invesco have declined over the past few years. The fund group is hoping to boost sales by offering the fund only through financial advisers. The reason: Most people buy broker-sold funds, according to the Investment Company Institute.
Investing in mutual funds isn't rocket science. If you want to keep life simple and do it yourself, you don't need an adviser. Had you just bought an index fund that tracks the S&P 500 and a bond fund, your investment would have grown at a 9 percent annual rate over the past seven decades. And, nine percent is nothing to sneeze at.
But, paying for financial help is better than not investing at all. So if you are the type of investor who can't make up your mind or can't remain in an investment for very long, get some financial help.When you do, expect to pay a fee or commission.
To make sure you are getting your money's worth, consider this: A financial planner should look at your income and expenses and help you reach your financial goals. Then, they can pick some funds for you. A stock broker should analyze your tolerance for risk before putting together a solid choice of investments for you.
Alan Lavine and Gail Liberman are husband and wife columnist and authors of The Complete Idiot's Guide To Making Money With Mutual Funds, (Alpha Books).
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