Fidelity. Vanguard. JPMorgan. The names of such leading financial companies evoke security and trust. But bigger financial firms don't always mean better performance, according to a study by T. Rowe Price. The study looked at the collective performance of each fund complex's offerings over one, three, five and 10 years ending March 31.
Seventy-nine percent of T. Rowe Price's funds outperformed their peers over the past one and three years, 77% bested their peers over the past five years, and 74% over the past decade.
Vanguard also put in a strong showing, with 68% of this company's funds outperforming their peers over the past year, 76% over the past three years, 79% over the past five years and 82% over the past 10 years.
However, Putnam Investments' funds didn't fare so well, with only 28% of them outperforming their peers over the past year. In the past decade, only 20% did better than their equals.
Principal Financial Expands Bank Connections in India
Principal Financial Group has formed a joint venture with two banks in India in order to sell long-term mutual funds and other financial services in that market.
Principal Financial will own 65% of the new company, Principal PNB Asset Management Co., while Punjab National Bank will own 30% and Vijaya Bank will own 5%. Principal Financial has sold mutual funds in India since 2000, having first entered the market via a partnership with the Industrial Development Bank of India.
More Firms Offer Security Of Lifecycle Mutual Funds
In spite of the recent, strong upturn in the market, investors are still gun-shy and looking for guidance. Lifecycle funds that automatically shift the balance between equity, fixed income and money market holdings as people age have recently gained popularity, and, as a result, more fund companies are offering them - Fidelity, Vanguard, Charles Schwab, T. Rowe Price and Wells Fargo are among the firms offering them.
And with only one in six 401(k) investors making a change to their investments last year, according to Hewitt Associates, these funds may be serving a real need.
More Fund Managers Warn Against New Tech Bubble
Technology funds are up 36% year-to-date, making them the best-performing equity category so far this year, according to Lipper. That's great news, but it has some fund managers worrying that investors might think happy days are here again, a number of financial publications have reported.
Some managers, for example, viewed Hewlett-Packard's recent disappointing results as an early indicator that the tech rally could soon falter. Valuations, particularly in the semiconductor sector, could also present a problem. Overall, technology stocks are trading at an average P/E ratio of 40.
Even more disturbing, Money magazine reports that 119 technology stocks of companies with market capitalizations of $500 million or more have more than doubled so far this year - but a full 40% of them aren't expected to post a profit this year.
Copyright 2003 Thomson Media Inc. All Rights Reserved.