About Michael A. Weiss, CFA Expertise I can provide high quality answers to questions about mutual funds domiciled in the United States. Overall, I have 15 years of investment experience. I am currently the Editor of <a href="http://www.mutualfundinvestor.net/">The Mutual Fund Investor</a>, a quarterly publication that provides recommendations and commentary on various no-load mutual funds. I am also currently the Chief Investment Officer of a state registered investment advisory firm that specializes in no-load mutual funds.
Experience Overall, I have 15 years of investment experience. I am currently the Editor of The Mutual Fund Investor, a quarterly publication that provides recommendations and commentary on various no-load mutual funds. To learn more about The Mutual Fund Investor, please visit <a href="http://www.mutualfundinvestor.net/">http://www.mutualfundinvestor.net/</a>. I am also currently the Chief Investment Officer of a state registered investment advisory firm that specializes in no-load mutual funds.My mutual fund experience began at a company called Lipper Analytical Services, where I researched and wrote about mutual funds. Lipper is one of the premier mutual fund research and ratings organizations. After Lipper, I worked as an investment analyst for Merrill Lynch’s multi-billion dollar Mutual Fund Advisor and Selects Programs. I also have experience working with individual stocks and bonds. I have managed investment portfolios for both Merrill Lynch Investment Managers as well as Evergreen Investments.<BR><BR><B>Organizations</B><BR>CFA Institute
CFA Society of Philadelphia
<BR><BR><B>Publications</B><BR>The Mutual Fund Investor
<BR><BR><B>Education/Credentials</B><BR>CFA charterholder
MBA in Finance and Investments from the Zicklin School of Business at Baruch College<BR>
Expert: Michael A. Weiss, CFA Date: 8/20/2007 Subject: American Cenury Equity Income
Question A Morningstar link brought up an article in which you recommended TWEIX. The low volatility (especially in a Bear market) looks appealing although it had a dismal 2005 return. Why do you recommend it? I'm considering this fund or TEMQX which has a similar low risk and volatiity but slightly better annual returns.
Answer Hi Jim,
Thank you for the question. There is no free lunch in investing. Funds that are especially good at protecting capital will most likely not be very good in strong markets. American Century Equity Income Fund has excelled during bear markets and has produced somewhat inconsistent results during strong markets, but overall this fund has outperformed about 95% of large cap value funds over the past 10 years, according to Morningstar. Other appealing characteristics of this fund include its experienced management team led by Phillip Davidson, its rather low expense ratio of 0.97% as well as its emphasis on very large companies. It is important to note that this fund will become a load fund in September of this year, as American Century is changing the structure on some of its funds. Existing shareholders should be able to buy the fund at no-load.
TEMQX also provides downside protection, but at a much higher cost. Mutual Qualified has a 1% deferred load and an expense ratio of 1.83%, which is simply too high for me. Mutual Qualified’s portfolio manager Anne Gudefin has very good credentials and I really like the Mutual Series conservative investment approach, but this is not the same company as it was several years ago. The Mutual Series Funds have lost several very talented investment people over the years including Michael Price, Lawrence Sondike, Jeff Altman, David Winters, Ray Garrea, Rob Friedman and Peter Langerman. Peter Langerman came back relatively recently and now is the Chief Executive Officer as well as a portfolio manager.
It is important to note that American Century Equity Income is very different from Mutual Qualified in terms of its composition. The Equity Income fund is primarily focused on very large US companies and also invests in convertibles, while Mutual Qualified is a world stock fund with more of its equities outside the US than inside the US. Mutual Qualified also has a considerably smaller average market capitalization compared to the Equity Income Fund. These differences might help explain the performance differential between the two funds over the past several years. Over the past several years, international stocks have performed better than US stocks while small cap stocks have outperformed large cap stocks.
