Read and review commentaries written by Morningstar experts. These observations and insights are specific to Mutual Funds.
U.S. Fund Flows: Investors Continued to Pull Back in October
by Adam Sabban, CFA | 2022-11-22 05:00:00
Long-term mutual funds and exchange-traded funds suffered outflows of about $28 billion in October 2022 despite improved investor sentiment toward risk assets, following $77 billion in outflows in September. Seven of the 10 U.S. category groups shed assets in October.Trouble for Taxable-Bond Funds ContinuesInvestors pulled $21.9 billion from taxable-bond funds in October, most of all category groups. The tide looked to turn when they notched their only month of inflows in 2022 in August, but two consecutive months in the red erased that momentum. The Morningstar U.S. Core Bond Index retreated 1.29% in October as yields on Treasury bonds increased.Bond Investors Go LongThe short-term bond category accounted for about half of taxable-bond outflows in October, shedding $10.7 billion. Their $60.6 billion year-to-… Full Story
4 Bond Funds With Tax Issues
by Paul Olmsted | 2022-11-21 05:00:00
Taxes, like fund expenses, can erode investment returns. For taxable-bond funds (held in taxable accounts), investors should be aware of the aftertax returns to maximize long-term performance. Investors typically pay taxes on ordinary interest income, but other factors, such as higher portfolio turnover or strategies emphasizing income over capital preservation, can make things worse.Morningstar’s tax-cost ratio measures the tax impact of regular interest and capital gains distributions on which investors must pay income taxes for the year they are received. This ratio, which isolates the effects of taxes from a fund’s management, measures how much of a fund’s annualized return is reduced by taxes on fund distributions. This helps investors evaluate if a manager limits taxable distributions or where to position certain fun… Full Story
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1You could lose money by investing in a money market fund.Although the fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so.The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the FDIC or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
2You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the FDIC or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
3You could lose money by investing in a money market fund. Because the share price of the fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the FDIC or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
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Mutual Funds: Commentary
Commentary
Read and review commentaries written by Morningstar experts. These observations and insights are specific to Mutual Funds.
U.S. Fund Flows: Investors Continued to Pull Back in October
4 Bond Funds With Tax Issues
U.S. Fund Flows: Investors Continued to Pull Back in October
4 Bond Funds With Tax Issues
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