Q. I’m not exactly sure what to make of Mutual Shares Fund. Is it a worthwhile investment?
More Top Picks Best Red Light Bulbs For Sleep
V.C., via the Internet
A. This unusual fund heads in three different directions at once in order to nab the best available opportunities.
It has inexpensive value stock investments, it is involved in arbitrage and merger situations, and it buys distressed debt. The portions of the portfolio assigned to each of these categories vary according to prevalent investment trends.
Though disciplined, it doesn’t fit neatly into investment style boxes. It will also endure dry spells due to its desire to capitalize on trends.
The $25.8 billion Mutual Shares Fund “A” is up 25 percent over the past 12 months to rank in the top one-third of value funds. Its three-year annualized return of 16 percent places it in the upper one-fifth of its peers.
“An investor in this fund must have a long-term investment horizon and be tolerant of its flexible portfolio and the fact it may buy smaller-cap stocks at any point,” said Bridget Hughes, analyst with Morningstar Inc. in Chicago. “If you’re looking for a fund that’s large-cap stocks all the time, this isn’t it.”
Whether it could represent a core holding depends on what investments an investor already holds, she added.
Portfolio manager Peter Langerman and this flagship fund represent a long Mutual Series value tradition of taking on the management of companies to improve shareholder value and protect interests of fund holders.
More than 30 percent of Mutual Shares holdings are in financial services, with consumer goods and industrial materials other substantial concentrations. Its largest holdings are Berkshire Hathaway Inc., Weyerhaeuser Co., Orkla ASA, Altadis Group, White Mountains Insurance Group Ltd., Tyco International Ltd., Verizon Communications Inc., British American Tobacco, Altria Group Inc. and Fortis N.V.
This 5.75 percent “load” (sales charge) fund requires a $1,000 minimum initial investment and has an annual expense ratio of 1.10 percent.
Q. Are there any good reasons to keep my stock certificates myself rather than with a brokerage firm?
A. When you hold a physical certificate, the company knows how to reach you and will send company reports and other information directly to you. This may also make it easier to pledge securities as collateral for a loan.
The downside is that you must get the certificate to your broker or the firm’s transfer agent to sell it, making a quick sale more difficult. In addition, if you lose your certificate you could be charged a fee for a replacement.
The popular alternative is to have your security registered in “street name” and held in your account at your broker. You won’t receive a certificate, but you will get an account statement that lists your securities; dividend and interest payments will be credited to your account, and you’ll receive mailings such as annual reports and proxies.
“The biggest reason for keeping a stock in street name is that when someone passes away it is so much easier for heirs to get the assets and proceed with settling the estate,” said David Bendix, certified financial planner and certified public accountant with Bendix Financial Group in Garden City, N.Y.
———-
Andrew Leckey is a Tribune Media Services columnist. E-mail him at [email protected].