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: 9/21/2007 Subject: No load vs/Front end Loaded Fund!
Question Last November I was approached by an officer from Chase Bank, where I do all my banking. She asked me about my investments. I told her I was with T. Rowe Price through their Capital Appreciation Fund and was quite happy! She wanted me to make an appointment with one of their investment counselors. I had no intention of changing my portfolio, however after showing me a print out from one of the Franklin investing funds, symbol/FFALX , I decided to make a change. Ten months after the change, I am still in the negative side of the investment. Here's my problem, I'm 74 years old with them investment portfolio in the neighborhood of $170,000. I have no encumbrances with the exception of everyday living expenses. Should I go back to T. Rowe Price after my current Fund gets on the positive side of my investment or stay with Franklin group? Your input will be greatly appreciated!
Respectfully,
Philip him
Answer Hi Philip,
Thank you for your question about no load versus loaded mutual funds. Please understand that I cannot provide you with personalized mutual fund investment advice in this type of forum. With that said, I will certainly try to help you. First let me say that you are completely justified to be frustrated with this situation.
T. Rowe Price is a world class no load mutual fund company with many good no load funds in a variety of investment categories. T. Rowe Price funds have fairly low expense ratios, solid investment management teams and are no load. I prefer T. Rowe Price over Franklin Templeton.
I am not sure why someone would have wanted you to switch from T. Rowe Price Capital Appreciation Fund to Franklin Templeton Founding Funds Asset Allocation Fund. Both of these funds are somewhat balanced with primary exposure in equities and the remainder bonds and cash. FFALX is value-oriented and has considerable international exposure. Value and international funds have performed extremely well over the past several years. I suspect that having considerable international and value exposure contributed to FFALX having very good numbers over the past few years. Value funds, however, have been poor performers in 2007 and so has FFALX, according to Morningstar.com. It is important to point out that the Franklin fund is a combination of 3 Franklin funds. Mutual Shares, Templeton Growth, and Franklin Income.
T. Rowe Price Capital Appreciation Fund has also had very good numbers over the past several years and has also slowed down this year, but not as much as FFALX according to Morningstar.com.
Overall, I think that Both Capital Appreciation fund and Asset Allocation Fund are good mutual funds, but Capital Appreciation Fund’s significantly lower expense ratio gives it an advantage. If you stay with Asset Allocation Fund, you will be paying higher fees every year in addition to the sales charge you already paid. If you plan to switch again, you probably should look at other high quality no load mutual funds as well.
