Q. I’ve read good things about Tocqueville Fund. Is it a good bet?
R.V., via the internet
A. This fund’s investment strategy can be offbeat and it has a pricey annual expense ratio of 1.34 percent.
It bought poultry stocks during the bird flu scare this year on a belief fear would be temporary and people would eat chicken again. It saw an increase and quickly sold. It invested in downtrodden industrial stocks several years ago, enjoyed their revival and has since sold most of them.
It continues to own Microsoft despite its sideways drift because it is trading down from historical highs.
That contrarian nature has delivered excellent returns for its investors.
The $235 million Tocqueville Fund (TOCQX) has had a total return of 14 percent over the past 12 months to rank in the top 5 percent of large growth and value funds. The three-year annualized total return of 18 percent and five-year annualized return of 9 percent rank in the top 1 percent and 2 percent of its category, respectively.
“Portfolio manager Robert Kleinschmidt looks at what’s out of favor generally in the market and picks his spots, so it’s a combination of top-down and bottom-up investing,” said Laura Pavlenko Lutton, analyst with Morningstar Inc.
It can make significant bets on sectors, she added.
This “no-load” (no sales charge) fund requires a $1,000 minimum initial investment.
Q. My wife and I started looking into life insurance and are confused by variations you can buy. What are the main types we should look at?
J.D., via the Internet.
A. With life insurance available from 2,000 companies, the many different policy names and attributes require more careful study than possible here.
But be aware of several categories:
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– Term insurance lets you buy coverage for a specific price for a specified period. If you die during that time your beneficiary receives the policy value.
– Whole life covers your entire life. Premiums remain level and the company invests a portion of your premiums. It has a growing cash surrender value, also guaranteed.
– Universal life lets you determine how much to put in beyond the minimum premium, with the investment vehicles usually bonds and mortgages. Some policies pay out face value on the policyholder’s death, while others exceed it.
– Variable life generally offers more investment products, such as stock funds. Beneficiaries can either receive face value, or all or part of the cash account as well.
“While term life is generally cheaper than permanent life insurance, there’s no cash surrender value and the policy runs out at some point,” said David Woods, chief executive of the National Association of Insurance and Financial Advisors in Falls Church, Va. “Quality of an insurance company is important and you should pick a firm with an `A’ or better rating from the major rating services.”
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Andrew Leckey is a Tribune Media Services columnist. E-mail him at [email protected].