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Which Stocks Does Your Mutual Fund Hold?

Mutual fund holdings are vital information to fund investors when evaluating a manager’s performance as reported. Without knowing what a fund’s holdings are, investors can neither fully appreciate why a manager has performed well, nor can they thoroughly come to grasp about any poor results. Even if a fund is doing ok, investors may decide that the fund investments are overlapping with their other portfolios or not in line with their own investing goals and want to relocate the money elsewhere. But without access to a set of complete information on a fund’s portfolio, investors are basically kept in the dark and can’t decide for themselves on any of those personal investment decisions.


What Does the Law Require
By law, mutual funds are required to release complete portfolio holdings only twice a year. For actively managed funds, in the interim of 6 months, their holdings could have been turned over many times and the information at investors’ hands can never be real time, live feeds, considering today’s online technology has made instant exchange of information nothing but possible. In fact, the decades-old securities law enacted such a rule because of the concern that fund companies couldn’t afford to mail out a report every day.


Objection to Frequent Portfolio Disclosure
Chief concern among mutual fund companies is that timely portfolio updates of fund holdings can tip off their intentions to the market. It may cause potential front run on a fund where other traders can buy shares ahead of the fund and drive up prices, while the fund is still taking the time to build up positions in a stock. But supporters of full, on-time publication of portfolio holdings argue that the hidden reason why funds are reluctant to do anything beyond what the law requires is that managers might be concerned about revealing questionable trading practice in any disclosure. Funds do a lot of window-dressing trading close to quarter end to boost performance and increase management compensation.


Other Concerns by Financial Advisers
Some financial advisory don’t think that requiring more disclosures of a fund’s holdings is a good idea. They contend that overwhelming information can lead investors to losing their long-term focus and becoming obsessed with fund trading. The advantage of having accessible information as claimed by some investors may be overblown. They also observe that people who are trading stocks and looking for ideas are more interested in getting a first look at a fund’s holdings.

Amid all the conflicting viewpoints, some mutual fund companies are stepping up to make more frequent disclosures on their portfolio holdings. More quarterly updates are now available, with monthly reports on top holdings. To the delight of some investors, a fund named OpenFund lets investors view active trading on its website, while others post weekly trading commentaries by fund managers. A standard monthly reporting ought to be possible if the idea of leaving out sensible trading information is made to consensus.

What happened to the stock market today?

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High Yields: How to Invest in a High-Yield ETF

If you are like most people, then you like the idea of having your money work for you. One way in which it does this is when it is invested. When your money is invested, it grows as the companies you are invested in grow. Thus, you make money off of the work of others.


However, all too often people are afraid to put their money to work in the stock market because it seems like a confusing place. Many worry that their money might evaporate away if a stock goes under. For example, if you invest in a gold ETF fund, and the price of gold collapses, then you’re busted — you lose your investment. The same goes for Oil ETFs, the natural gas ETF and others. While this fear is legitimate if you are invested in only one stock, there are ways to diversify your money and to grow it without having to learn the complexities of the market. This way is by investing in a high yield ETF.


A high yield ETF (Exchange Traded Fund) is an investment vehicle in which your money is given to a professional who manages the money for you by placing it into a number of high yielding stocks. A high yield stock means a stock that pays a high dividend relative to it’s share price. By investing in this kind of ETF you are allowing compound interest to work in your favor in order to significantly grow your money over time.


Conservative style investors might be particularly drawn to high yield ETF’s because of the glamor of the high dividend. Investors have the option of receiving their dividend (share of the company’s earnings) in the form of a check every three months, or in the form of reinvestment in the stock. Reinvestment in the stock gives you a bigger share each time and is generally thought of as the smarter move financially, unless you are using the money as income.


While ETF’s are a relatively new product of Wall Street, they are in many ways similar to mutual funds. They allow you to not have to worry about studying the stock market before investing. You may simply place your money into these funds on a set schedule (i.e. monthly, weekly, etc.) and allow it to grow over time for you. This makes your investing automatic, rather than focusing on random ETF news and sound bites. Naturally you should never jump into an investment halfheartedly. If you want your money to work for you and compound over time, then you are going to need to stick to your investment plan.

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