- Book Title: The Sage Guide to Mutual Funds - Superior Investment Wisdom form the Number One - Online Mutual Fund Gurus
- Authors: Alan and Stephen Cohn - founders of Sage online
- Year written/published: 1999
- Some extracts:
subjective test on morningstar.com
- gather your group of potential funds
- enter the fund ticket symbol
- has the fund performed in the top 50 percent most years?
- is its alpha, under the ‘best fit index’ column, greater than zero?
- is its ‘bear market decile rank’ 6 or lower?
- does the fund hold multiple sectors and have less than 40% of assets in all sectors?
- does the fund have at least 80% of its assets in stocks?
- is the start date of management at least 3 years?
risks and returns…
- low risk, high return - well-diversified portfolio
- high risk, high return - large stocks
- low risk, low return - bonds
- high risk, low return - small stocks, international, emerging market
international stock subjective test..
- is its alpha, under the ‘best fit index’ column greater than zero?
- is the sharpe ratio greater than 0?
- does the fund have exposure in at least 3 of the following regions? Europe, Japan, Latin America, or the Pacific Rim?
- Does the fund have less than 65% of its assets in each region?
- Under the ‘country exposure summary’ are there more than 4 countries listed?
- does the fund hold no more than 20% of its assets in any one country?
some useful indexes for specialised funds…
- value line index
- lehman brothers aggregate bond index
- MSCI EAFE Index