Mutual Fund Review: Pioneer Mid-Cap Value Fund Class A

Pioneer Mid-Cap Value Fund Class A (PCGRX) is one of several classes of Middle Capitalization funds managed by Pioneer funds. The Pioneer Mid-Cap Value sister funds are class B, C, R, and Y. The class A mutual fund is the largest of the 5 with over $900 million dollars in managed assets, a 1.13% expense ratio and a total return of nearly 4% since its 1990 inception date.

The Pioneer Mid-Cap Value Fund Class A is managed by a financial services and investments firm called Pioneer Investment Management, Inc. that is of European ownership and registration with offices and mutual fund tailored to the United States market(s). The company and/or asset management by the company has been in operation since the late 1920's. This review will discuss the Pioneer Mid Cap Value fund in regard to its performance, characteristics and competitiveness as a choice among an array of similar funds.

Pioneer Mid-cap Value Fund Class A performance 

If an investors expectations are moderate return on investment, medium risk, and equity portfolio diversification among multiple mid-sized U.S. companies across several industrial sectors, then the Pioneer Mid-Cap Value Fund Class A might be a good choice. The difference between the Class A fund and the others pertains to 1) assets managed, 2) expense calculations, fund creation date and availability to investors.

While the Class A fund has the largest amount of assets, it also incurs a sales charge and does not have exclusive ownership like the Class Y fund. In terms of performance, the Pioneer Mid-Cap Value Fund Class A has not greatly exceeded the Russell Mid-Cap Value Index that's 10 year return is around 21 basis points short of 4%. Moreover, the companies the fund invests in have relatively normal Price to earnings ratios and a near 75% index correlation indicating a somewhat predictable performance.

Competitive Positioning: Pioneer Mid-cap Value Fund Class A

The Pioneer Mid-Cap Value Fund Class A is managed for value and capital appreciation rather than niche market and outstanding potential to grow as would be more the case with a Small-Cap growth fund. In light of this, the fund is not entirely aggressive or high risk but rather a moderate position which itself has relatively frequent turnover of 61% of its assets within its portfolio. This indicates an active management with a short-term as well as long-term approach to asset management investing.

Middle capitalization firms that were not previously large capitalization firms, but rather small capitalization firms and in the investment portfolio of the Pioneer Mid-Cap Value Fund Class A may indicate strong value and/or potential growth due to current market conditions approaching the 3rd quarter of 2009. In terms of additional mutual funds of similar nature, the Pioneer Mid-Cap Value Fund Class A performs on average. Some of the higher ranked funds in this category as indicated by Morningstar rankings and smartmoney.com include the following:

• Artisan Mid-Cap Value Fund (ARTQX)
• Dreyfus Mid-Cap Value (DMCVX)
• American Century Mid-Cap Value (ACMVX)
• T. Rowe Price Mid-Cap Value (TRMCX)
• Janus Perkins Mid-Cap Value (JMCVX)

Summary 

The Pioneer Mid-Cap Value Fund Class A is a mutual fund that invests in U.S. companies with equity capitalizations under $10 billion dollars i.e. 'Mid-Cap'. The fund is slightly above average in return performance, is of moderate risk and invests primarily in diversified U.S. companies and industries.

The quality of the selection of these companies i.e. the management's ability to select quality and companies with high revenue and earnings growth potential is a significant factor affecting the performance of this fund. For example, a mid-cap company upgraded as such during an economic recession may have more potential than a mid-cap company downgraded to such during the same time period. This fund has a sales expense but is a no load fund with a fairly typical expense ratio for a mutual fund.

Written 06/15/2009 

Mutual Fund Reviews: T. Rowe Price New Asia Fund

The T. Rowe Price New Asia Fund (PRASX) was initiated on September 28, 1990, and is one of numerous international mutual funds managed by T. Rowe Price. T. Rowe Price (TROW) is a publicly owned and traded investment management firm that has been in business for over 80 years, has offices worldwide, and has a market capitalization/worth of over $10 billion dollars. According to the T. Rowe Price mutual fund prospectus, the New Asia Fund invests in small and large growth orientated companies throughout emerging markets within Asia, thus naturally excludes Japan.

Mutual fund performance

The New Asia Fund is ranked by Morningstar's star rating system with 2 stars for its 3 and 10 year return performance and 3 stars for its 5 year progress meaning it ranked between the 10-67.5th percentile of all mutual funds reviewed by Morningstar. Despite this relatively low ranking by Morningstar, the T. Rowe Price New Asia Fund has performed relatively well in terms of long term average annual returns yielding 6.01% if held since its first issue. Moreover, the New Asia Fund has returned higher 3, 5 and 10 year yields than the T. Rowe price International Growth and Income fund, the T. Rowe Price Global Stock Fund and the T. Rowe Price International Equity Index Fund.

The costs of owning shares in the T. Rowe Price New Asia Fund include an expense ratio of just under 1% with no load fees unless the fund is sold within 90 days of purchase for which a 2% redemption charge is incurred. The minimum investment amount for this fund is $2,500.00 for new accounts or $100.00 for existing accounts.

The risk of owning the New Asia Fund is higher than bond and blue chips funds, is ranked at the high end of the risk spectrum by T. Rowe Price, but has correlated quite closely with the Lipper Pacific (excluding Japan) funds average; moreover as of the date of this article, 28.7% of the funds asset value was distributed among 10 companies. The fund is heavily weighted in India and China among 5 core industry sectors. The funds management is somewhat limited in comparison to some other funds, however its longevity provides some testimony to its ability to perform.


Competitive positioning

Outside of T. Rowe Price mutual funds specializing in Asian growth companies provide competition for the New Asia Fund. Some of these funds have averaged higher returns than the New Asia Fund, whereas others have yielded lower average returns for multiple year categories. A few of T. Rowe Price's competitor funds are the Fidelity China Region Fund (FHKCX), the Goldman Sachs Asia Equity Fund (GSAGX), Dreyfus Emerging Asia Fund (DEAAX), and the AIM Asia Pacific Growth Fund (ASIAX). These funds have various investment objectives and sizes and average annual 5 year returns ranging from 0-10.95% (googlefinance.com). They are also managed by well established financial competitors in the financial services industry.

Summary

The advantages of owning the T. Rowe Price New Asia Fund is the potential for high return, no load fees, and stable management as indicated by parent company management, time since fund inception and long- term performance. The disadvantages of this fund are there are better performing Asian emerging market mutual funds to choose from as indicated by this article and the Morningstar mutual fund star rating system.

If an investor is diversifying mutual fund ownership through a T. Rowe Price account, the New Asia Fund provides a higher risk option through ownership of a handful of pre-selected companies within Asian emerging markets. Several competing funds to the T. Rowe Price New Asia fund exist with differing risk, investment mix, size and returns making the choice and necessity for research before purchasing such a fund beneficial to a more complete understanding of the costs, benefits and disadvantages of emerging market mutual funds specializing in Asian asset management.

Sources:

1. T. Rowe Price International Funds Equity Portfolios 2009 Prospectus
2. http://www3.troweprice.com/fb2/fbkweb/snapshot.do?ticker=PRASX
3. http://google.com/finance

Mutual Fund Review: American Century Heritage Fund

American Century Heritage Fund (TWHIX) is a mid-cap growth mutual fund with above average to high 3, 5 and 10 year rankings by both Morningstar and Lipper rankings. (americancentury.com). The fund came into existence in 1987, has assets over 1.25 billion U.S. dollars in worth which is invested primarily in U.S. securities in accordance with the fund's goals and governing policies. The American Century Heritage Fund is managed by two economists named David Holland and Greg Walsh, both of whom, have been at American Century Investments for at least 5 years.

The company itself is an established and highly charitable non-public asset management firm operated out of the U.S. Midwest. The TWHIX prospectus indicates the mutual fund comes in B, C and R classes. The class A American Century Heritage Fund shares charge a front end load of 5.75% of the purchase price whereas the B and C shares require no front end load but do have potential deferred and declining sales charges of UP TO 5% and 1% respectively. The R class shares require neither a front end load charge or a deferred sales charge. (2009 TWHIX Prosepctus)

American Century Heritage Fund performance

The American Century Heritage Fund has had a long-term life time performance return of 9.67% as of the 2nd quarter of 2009. The fund's expense ratio is reported by American Century Investments as being 1.01%. While these returns are not fantastic, they are not long-term negative and higher than U.S. money market and most certificate of deposit returns. Moreover, the companies 10 year return comes close to that of the Russell Mid-cap Index long term projected growth of 10.91% (russell.com)

Also, the fund's existence is in excess of 10 years giving it credibility in terms of longevity and transition through various economic and market conditions. Add to this the high marks afforded to The American Century Heritage Fund by Morningstar and Lipper, both well known mutual fund ranking organizations, a longstanding asset management company and relatively good short-term performance despite bad market conditions in 2008-2009 and this mutual fund generally stands as a performer on some level and in so far as mutual funds go.

Competitive positioning: American Century Heritage Fund

Few mid-cap growth funds come into near competitive with the American Century Heritage Fund at the 5 year level. However at the 3 month, 1 year and 3 year level the Yahoo finance top performers for this category of mutual funds include the following mutual funds in addition to MorningStar and Lipper high ranked mid-cap growth funds. These other mutual funds may or may not be truly competitive with TWHIX, however indications that they are may warrant further investigation in ascertaining a more refined competitive positioning of the American Century Heritage Fund class A.

• BB&T Special Opportunities Equity Classes A, B and C (BOPAX, BOPCX, BOPBX)

• Monteagle Informed Investor Growth (MIIFX)

• Monetta Mid-Cap Equity (MMCEX)

• FBR Focus Fund (FBRVX)

• Northern Mid Cap Growth Portfolio, Class A (BMGRX)

Additional factors to consider in assessment of the American Century Heritage Mutual Fund are its above average total annual assets turnover ratio of 178% as reported by Yahoo finance, the multiple classes of the fund, a contradiction between reporting in the fund prospectus and mutual fund reporting sites in terms of load fees, and the funds 40% down year percent ratio. (finance.yahoo.com) Despite potential discrepancies and questions regarding this funds performance and competitiveness, it has still maintained a long-term position among its competitors that may be worth consideration.

Summary

For a mutual fund with high recognition as a leader in its fund category, with relatively low expense ratio, sound investment principles and good long-term return, the American Century Heritage Fund (TWHIX) may be a mutual fund worth considering. As mutual funds go, this one may be a steady prospect.

Since the company that manages the fund is private, access to corporate asset management statistics and financial statements may be limited. Nevertheless, the American Century Heritage Mutual Fund is respectable mid-cap growth mutual fund as it pertains to its management, long-term fund performance, institutional ranking and competitive performance.