Q. I have 15 years until retirement and I’m looking to add a value fund to my portfolio. I’m considering Vanguard Selected Value. What’s your opinion?
B.J., via the Internet
A. It takes plenty of cash to play its game. But if you can handle its hefty $25,000 minimum initial investment, this fund is worth considering.
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The $1.4 billion Vanguard Selected Value (VASVX) is down 5 percent over the past 12 months, ranking just above the mid-point of all mid-cap value funds. Its three-year annualized return of 6.75 percent puts it in the top one-fourth of peers.
“Portfolio manager Jim Barrow was brought in to fix the fund in early 1999 because it was underperforming, and he’s done an admirable job,” said Daniel Wiener, editor of The Independent Adviser for Vanguard Investors newsletter (www.adviseronline.com), 7811 Montrose Rd., Potomac, Md. 20854. “This fund plays to his strength, which is looking for non-tech value in mid-cap stocks that tend to be overlooked.”
Barrow boasts a tremendous 30-year track record that has included Vanguard Windsor II, Wiener added. Less than 40 stock names are generally held in the fund, versus the typical 90 held by mid-cap funds. Barrow prefers very low valuation stocks with high dividend yields and sells when valuations get too high or fundamentals slide.
Keep in mind that it won’t do as well during growth-oriented market periods.
Q. I’ve always done a good job of keeping my checking account in order but recently bounced a check because of a miscalculation. The bank charged me $28 for the error. Is this unusually high? What can I do about such high fees?
M.R., Chicago
A. It is higher than usual. The median fee nationwide for a bounced check is $22.88 at a bank and $20 at a credit union, according to the Moebs Services economic research firm in Lake Bluff.
The best solution is to be conscientious and simply take the time to reconcile your checkbook whenever you write a check. Surveys over the past 30 years have shown that seven out of eight Americans never bother to make sure that their checks correspond to what they have in their account.
You can also seek out a financial institution that exacts a lower charge for such transgressions. The larger institutions tend to have larger fees, according to Moebs.
“If you’re a customer in good standing at a community bank and make a polite phone call to say you made a mistake, our research indicates that 26 percent of the time it will waive the charge,” said Michael Moebs, chairman of the firm bearing his name.
Another option is to use the bank’s Web site as an easy no-cost way of checking on your account balance and moving money from another account if necessary. Ninety percent of banks and 64 percent of credit unions have interactive Web sites.
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Andrew Leckey answers questions Sunday in Business and Tuesday in Your Money. Address inquiries to Andrew Leckey, P.M.B. 184, 369-B Third St., San Rafael, CA. 94901-3581 or by e-mail at [email protected].