Actively Managed Mutual Funds Out Perform Index Funds!

For the first two months since I hypothetically invested in affordable mostly managed mutual funds (there are a few index funds where no competitive actively managed fund was available) the funds I picked have outperformed comparable Vanguard Index funds.


Though note that the Index portfolio did slightly better today. I think for a few days on my recent trip the index portfolio pulled ahead.

They are really close though. The big surprise to me has been how poorly the ETFs have performed. I would have thought they would have been more or less in line with the index mutual funds, but they have fallen almost 1% behind.

What the heck is Janus Contrarian?

When I noted the market was tanking today, I decided to make my hypothetical investment for June in the second fund of the "WylieMoney Slowly" portfolio. In this portfolio I am adding one of the 20 funds I researched each month, starting in May 2007. money

The second fund I originally chose was a Global Equity fund: MDISX. money

Well according to Etrade, this fund is closed to new investors:

But according to Morningstar, this fund is not closed and is available through Etrade: money

Regardless of whether this is a mistake on Etrade's site or not, getting someone to help you is not worth the effort. money

So I decided to pick my original runner up, Janus Contrarian JSVAX. This brings me to the title for this post. money

Back in November of 2006, it was open to new investors and it was categorized as World Stock or Global Equity. But tonight, as I look it up, it is not. Morningstar lists it as Large Blend which means it invests primarily in Large Cap American companies. money

Morningstar also shows that it is a Large Cap Growth fund. Note the red dot.


But more curious to me is the allocation of 37.8% in non-American companies!


Why does this matter? Well funds are compared to their peers. So if your peers are domestic funds and you have been gaining profits from surging international markets, you are going to look great compared to your peers:


But if your peers are World Funds which invest in stocks all over the world, you are not likely to look as stellar:


Well MDISX is 70% invested in international companies so it certainly has more of an international focus now than JSVAX but JSVAX has a 39% turnover ratio so who knows what it looked like last December, much less what it will look like in 6 months. money

Regardless, I'm calling it a Global Equity fund and I added it to the WylieMoney slowly portfolio tonight as of today's closing price. money

Lazy Portfolio continues to catch up

With today's nice sell off, the Lazy portfolio made up more ground, but the WylieMoney portfolio held on to its tenuous lead with a 1.98% increase since I invested on May 1st. money

I have added a summary over on the right which I will update going forward. money

Managed Mutual Funds, Index funds and ETFs...

...are going every which way these days. Since I first invested, the WylieMoney portfolio wins. Year to date, the Vanguard portfolio is ahead. And today, ETFs did the best. I will invest in fund #2 sometime this month when the time is right. money


I am still waiting on a response from Etrade and will try and follow up tomorrow at lunch.

I'm also switching my employer sponsored retirement plan from one of our two options to the other. I'll explain why soon. money

Finally, I leave for New Orleans this weekend and plan to write about the trip here! money

WylieMoney Portfolio continues to slide

Close call, but the Vanguard funds beat my picks by .02% today. My funds are still ahead since my 'purchase,' but year to date they are tied. ETFs continue to fall behind. MONEY

Mostly Managed Portfolio Loses Ground...

...but still remains in the lead! MONEY

First of all, last week I went to Etrade's office in downtown Boston and explained my issue to Justin, who forwarded it to the 'Mutual Fund Department' with a link to this site. So if you are here looking for the details of my issue, click here or on the link in the upper right corner. Basically your site is not allowing me to set up an AIP plan with the additional minimum for AIP plans for the fund SSEMX which is $100. MONEY

On to the competition! MONEY

As of today, the WylieMoney portfolio is still ahead, but not by much. I think today's slight under performance is due to some dabbling of a few of my fund managers in emerging markets which did poorly before American markets caught fire. The year to date totals for WylieMoney and Lazy are remarkably close. I wonder how long that will last. MONEY

Anyway, I made a little chart of the the random dates that I have managed to document the total value of the accounts. This does not represent day to day performance as I only have totals from 8 days over the last month, but once I have several months of data, the graph should be loosely indicative of trends. MONEY

Mostly Managed vs 'Lazy' Vanguard Index funds

I promised weekly updates and failed. I'll try and come up with a good system I can keep on top of.

My negligence is not due to shame from the WylieMoney portfolio lagging behind. Far from it. Not only is the Wylie portfolio ahead since I 'hypothetically invested' in it, it has pulled ahead of the lazy portfolio year-to-date as well. Also, I realized that the reason the ETF portfolio appeared to be ahead of all the portfolios was that a few of the options, including two of the Bond funds, have not existed for a year and were being left out of the calculation so I am leaving out the ETF YTD number.

I included today's performance as well. The one-fund WylieMoney Slowly 'portfolio' is way ahead both year to date and since I 'invested' but note that its loss today is over twice that of the more balanced portfolios. And when I add the second fund in June, a Global Equity fund, I do not anticipate it will settle down...

Here are the details of each Portfolio. Click the image for a larger view:

WylieMoney

WylieMoney Slowly

ETFs

Lazy

P

Oh yea... and Managed funds win again!

I was kinda curious what would happen when the US Markets took a dive like they did today. I am pleased to report that the Wylie Portfolio won, losing hundreds of dollars, but not losing as much as the "Lazy Portfolio" of Vanguard funds or the ETFs.

Managed funds beat index funds and ETFs!

Nice title eh?

On 5/01/07 I hypothetically invested in a portfolio of mutual funds you can buy through a single brokerage for no commissions with a $2500 minimum in each. For comparison I invested in corresponding portfolios of Vanguard Index Funds- the "Lazy Portfolio" (which you can't do- they require $3000 each to start) and ETFs (which require commissions). I also invested in a single fund from the 20 mutual funds and plan to add an additional fund each month for 20 months.

I have not decided how often I will provide updates or in what format exactly so for now I will keep it simple and once a week.

For the first week, the Wyliemoney portfolio of mostly managed mutual funds, available through Etrade, beat the Index and ETF portfolios. Note that year-to-date, the ETF and Index portfolios win. I am not paying too much attention to the single fund or "Wyliemoney Slowly" portfolio until I add a few more funds.

The Real Scoop- Managed Funds, Index Funds or ETFs?

I just invested $152,824.12. (Hypothetically)

As promised, I have invested $50,000 in the Wylie Portfolio, $50,000 in a portfolio of Vanguard Index funds, $50,000 in a portfolio of ETFs, and $2500 in the first Wylie fund of the Wylie Portfolio. By first fund, I mean the first fund I picked: NTIAX. The extra $324.12 comes from fees required for the ETF portfolio and the exact cost of each ETF position being a little more or less than $2500.

So we have a portfolio of assorted managed funds and a few index funds you can buy through etrade for no fees, a portfolio of Vanguard index funds that you can't buy through Etrade or Vanguard for any fee because each fund has a $3000 minimum. I only invested $2500 to make the comparison simple. We have a portfolio of ETFs you can buy through Etrade for $12.99 each. And we have a version of the mostly managed portfolio I will add to one fund per month.

The purchase dates for all these portfolios is the price as of closing on 5/1/07. So if you have your own portfolio you want to compare to these, go to morningstar and create your own portfolio and enter your purchase at the price from 5/1/07. It is easy to look up historical prices. One way to do this is to go to Yahoo Finance and look up your fund or stock and click the "Historical Prices" link.

So far, the Wylie Portfolio invested in just one fund is in the lead, up 1.44% and the entire Wylie Portfolio of 20 funds is up 1.09% compared to the Vanguard Portfolio which is up 1.02% and the ETFs which are up .46%. Note that Year to Date, the Wylie Portfolio is in last place:



Some of the ETFs have not been in existence since 1/1/07 so I am not going to put too much creed in that figure as it is not an equal comparison. I'm also not going to put much creed in performance of two days. We'll see how things look in a bit.

Here are the portfolios. Click the image for a larger view:

Non-Retirement: Inflation Protected Bond Mutual Fund

Wylie Pick: American Century Inflation Adjusted Bond inv ACITX

Selecting from mutual funds available through Etrade with no load or transaction fee and an initial $2500 investment or lower minimum and subsequent $100 or lower minimums, when looking for an inflation protected bond fund, I use the Mutual fund screener and find one.

Back in November of last year I started this project. This is the 20th fund and it is the last pick for this portfolio.

It looks pretty average all around. Expenses are a fairly low 0.49%. It gets three stars- average returns with average risk.

Actually if you look at it using Morningstar, it looks like it is slightly ahead of its category and its peers. Regardless, we are not talking about spectacular returns. Hopefully it will stay average. If this category performs really well, that will likely mean that inflation is out of control and that might be good for this fund, but the rest of the funds, not to mention the economy might be less amused.

So there is only one option, but it serves our need so ACITX is the pick!

Non-Retirement: Foreign Large Cap Blend Mutual Fund

Wylie Pick: BlackRock International Index A MDIIX

Selecting from mutual funds available through Etrade with no load or transaction fee and an initial $2500 investment or lower minimum and subsequent $100 or lower minimums, when looking for another Foreign fund, I include all International Foreign Category Funds and use the Mutual fund screener to a number of options.

I was planning to choose a Foreign Small/Mid Cap Value fund to balance against the Foreign Small/Mid Cap Growth fund already selected. Sadly, there is only one available through Etrade to new investors and I do not like the looks of it.

ICON International Equity I IIQIX is listed as a Small/Mid Cap fund, but then is also listed (yes, both links go to the same page!) as a Large Cap Blend fund that recently changed from being a Large Cap Growth fund. The average market value of companies held by the fund is $15 billion. A small company fund this ain't. And it may be focused on value companies or growth or both. Now we could dive deeper into this and try and figure it out, but why bother...

The expenses on this fund are 1.71% which is higher than any of the other Foreign funds across all categories. The turnover ratio was also higher than all other funds from this search and that is only acceptable if performance is stellar on a comparative basis and it is not. It has slightly out-performed one of the benchmarks it claims to track, but has underperformed the average of its peers in this group:


So instead of a Small/Mid Cap company fund I'll chose a Foreign Large Cap Blend fund to compliment the Foreign Growth and Value funds already in the portfolio and I'll ignore the ICON fund because of high expenses and turnover.

Among Blend funds we have 6 choices and really 2 choices that stand out. And upon further investigation, one of these two funds- SSgA International Stock Selection SSAIX is listed as a Blend fund but is also listed as a Value fund and has been a operating as a Value fund for many years. I already have a value fund so I am going with the other choice.

I'm starting to wonder if all of these category designations are being manipulated to represent performance in a better light than is legit. Funds are often measured against their peers, but if a fund is compared against peers in a category other than the one in which it invests, then the comparison is not really valid and perhaps fraudulent.

Anyway, BlackRock International Index A MDIIX is a foreign blend index fund. It has lower than average expenses (0.81%) and turnover (23%) which one expects with an index fund and has performed better than all the other legit Blend funds available over the last year.

When to buy Mutual Funds Part III

In Part I we pondered the issues involved in deciding when to invest. In Part II we looked at a few tools and discussed some strategies to help gauge what shape the market is in. In part III we will work out a system to invest in the wylie hypothetical portfolio of 20 mutual funds.

To make the initial investment in the 20 funds I am picking, I would need $50,000. Many of these funds have $2500 initial investments, so I plan to make a hypothetical initial investment of $2500 across the board to keep things simple. Hey- it is only hypothetical money, after all.

If I was investing my hypothetical $50,000 and it was mid to late 2002, I would invest it all right away. Indeed, in 2002, I did invest the savings I had set aside to invest, as soon as I was sure I could leave it invested for a while. I wish I had $50,000 real dollars to invest in a portfolio like this at that time as many of these funds are way up over the last 5 years.

That said, I do not think today is a terrible time to invest but also it does not feel like the best time either. So to invest my $50,000 hypothetical dollars, I will invest $2500 in one fund at a time, once every month. This will spread my initial investments out over almost two years.

I also plan to invest all $50,000 in a separate portfolio, right away and I will see after the fact which approach was better.

Once I make the minimum initial purchase for each fund I will add $100 to each fund or $2000 per month into the entire portfolio. And I will keep an eye on the market and the first day each month that markets are down about 1%, I will make that subsequent purchase. Etrade actually lets me do this for now. The $100 minimum for additional investment into mutual funds is often listed as being contingent on setting up an Automatic Purchase Plan, but I have found that I can pick the day myself and make the purchase manually for mutual funds I own (which again is not all 20 of these!).

I will invest these funds in two hypothetical portfolios in Morningstar's portfolio tool, unless I find a better one by next week.

Now some of you are saying- "I do not have $50,000 or $2000 extra a month to invest so what do I care" I tried to pick funds in a specific order such that one could invest any amount between $10k and $50k and still employ a system like this one. For example one could put $10,000 in a wylie portfolio of 4 funds. Then, if one could save $400 hypothetical dollars every month or every other month or even every quarter, one could still use this system- though there is no guarantee you won't lose gobs of money so do your own research and take responsibility for your own investments!

I'll try and work out how hypothetical portfolios of fewer funds perform as well.

Finally, I want to compare my list of Etrade's best no load no fee mutual funds (in my opinion!) against a similar portfolio consisting of Vanguard index funds and also against a portfolio of ETFs.

If all the work I did picking mutual funds does not lead to a portfolio that outperforms what could be easily done with simple index tracking, that will be good for me to know when I do have $50,000 real dollars saved up after I stick with all our tips for living cheaply!

So to do this, I need to finish picking the 20 funds. I hope to set up the portfolios starting in May so expect a few more posts soon!

Non-Retirement: Small Cap Blend Mutual Fund

Wylie Pick: Dreyfus Small Cap Stock Index DISSX

Selecting from mutual funds available through Etrade with no load or transaction fee and an initial $2500 investment or lower minimum and subsequent $100 or lower minimums, when looking for a Small Cap Blend fund, I use the Mutual fund screener to screen out options with 3, 4, or 5 stars and find a number of choices. money

There are a few index funds and a number of actively managed funds two of which are recommend by Etrade. Like the Mid Cap Blend pick, I am going to pick an index fund in the Small Cap category for a couple of reasons. The Small Cap Growth and Value picks are both actively managed so if Wylie were to actually buy these funds, an index fund would be a good diversification next to these. money

More importantly, the managed funds are more expensive, generate more tax exposure and have not consistently out-performed to overcome these negatives. money

Allow me to illustrate:


The expenses and the turnover of the Index fund are less than half those of the two actively managed funds. money

When you use Yahoo charts to look at the year to date performance of these three funds, the index fund (blue) is off to a rough start. It is upu for the year, but trailing the competition.


Jump back to mid 2002 and buy in and the index fund actually comes out ahead. money


Looking at the performance record, each fund has underperformed the other two during one of the periods over 1, 3 and 5 years. money

Given the solid long term record, lower expenses and turnover, Dreyfus Small Cap Stock Index is the Wylie pick. money

Non-Retirement: Bond Inter. Term Mutual Fund

Wylie Pick: Managers Bond MGFIX

Selecting from mutual funds available through Etrade with no load or transaction fee and an initial $2500 investment or lower minimum and subsequent $100 or lower minimums, when looking for an Intermediate Term Bond fund, I use the Mutual fund screener to screen out options with 4, or 5 stars and find 6 choices. money

Click the image for a larger view comparing the funds as of Etrade's data on 3/25/07:


Westcore Plus and Managers are the two 5 star funds and they have both been 5 star funds over 1 year, 3 year, 5 year and 10 year periods. money

Westcore Plus Bond has trailed Managers Bond slightly and has slightly more risky holdings (A instead of AA) so despite higher expenses and higher turnover, Managers is the pick for this hypothetical portfolio as it has out performed all along the way and has more management expertise. money

What investment records should you keep?

Keep them all. money

Lots of financial sites and blogs post articles offering advice about what records to keep in general: bankrate, soundmoneytips, realsimple, even the IRS has made an attempt.

As is often the case, Morningstar has one of the best explanations for why this matters when it comes to investment records. money

I keep every monthly statement from my brokerage and have a file over 2 1/2 inches deep to show for it. I wish this was an indicator of massive wealth, but really it is just a symptom of reinvested dividends. money


If you put $500 in a growth and income fund and reinvest the dividends and capital gains, each payment- in cents, dollars, whatever, is a transaction on the statement. And at the end of the year, you pay income taxes on those payments, even though they are (re)invested, and not cash in your pocketses. So if you do not have a ton of money (yet!), but still want to diversify broadly and put a small amount of money in a number of funds instead of just piling it all into one, your statements get long. money

Some of the new retirement funds like Vanguard Target Retirement 2050 are actually a collection of funds, so you can put all or some of your money in one of these, even if you do not plan to save it until retirement, and diversify that way, but I digress money

Some brokerages are no longer sending paper statements automatically and actually charging investors for this 'privilege.' Here is Ameritrade, disclosing its fees:

So if you only get electronic statements, or opt to get electronic only, you have to keep those too. And back them up! money

I finally got my 3rd and 4th brokerage account tax statements. One of these adjustments changed how $22.46 was allocated for tax purposes. I waited a month and a half to file my taxes because of how $22... good grief. money

So anyway, I sold a fund last year and I knew how much I originally invested, and Etrade does a good job of keeping track of funds that have automatically reinvested since they bought my account from my previous brokerage. My old records, however, did not convert to my Etrade account so I had to go back through my paper records starting in 2000 when I bought the fund to calculate my actual basis. This took me about 3 minutes to do because I had all my records in order and this changed my basis by a couple of hundred dollars which lowered my tax bill enough to buy a decent bottle of wine! Or, if I shop at Trader Joe's, 3 or 4 decent bottles of wine! money

So the lesson here is that you should keep your statements, paper or electronic, because your brokerage may be bought by a competing brokerage, or it may raise its fees and you may transfer your account to a better brokerage and all your details may not transfer over. And unless you want to pay the tax man (or woman) for the same profits twice, you'll want to be able to add up your actual basis, not just the amount you originally invested and having your statements handy and organized makes this pretty easy. money

Non-Retirement: Foreign Emerging Markets Mutual Fund

Wylie Pick: SSGA Emerging Markets SSEMX

Selecting from mutual funds available through Etrade with no load or transaction fee and an initial $2500 investment or lower minimum and subsequent $100 or lower minimums, when looking for a Diversified Emerging Markets fund, I use the Mutual fund screener to screen out options with 3, 4, or 5 stars and include choices with higher expenses since generally, international funds have higher expenses. money

I find three options: Excelsior Emerging Markets UMEMX, Managers Emerging Mkts Equity MEMEX, and SSGA Emerging Markets SSEMX. money

Each has outperformed the other two in one of the standard periods used to calculate returns (1 year, 3 year, or 5 year). SSEMX is the only one with a 10 year record (10% average annual return). money

I also looked at funds with very high turnover and find Amer Century Emerging Markets Inv TWMIX. It has an astonishing 115% annual turnover. Its one year return is 30%. Compare that to SSEMX at 16.83%. money

TWMIX's top holding is an Emerging Markets ETF. money


Its third top holding is a company that is the second biggest holding of that ETF. money


Gazprom has been creating billionaires in Russia for several years as it is basically the largest 'privatized' company in Russia and is the biggest extractor of natural gas and the third biggest oil company (according to somebody who wrote it in wikipedia... hehe) . Note that Gazprom is listed under the country 'United Kingdom' on these charts. Welcome to the wild world of trying to invest in international businesses in emerging markets. I'm guessing this discrepancy is because shares of Gazprom are traded on the London stock exchange, but I could be wrong. money

Regardless, TWMIX has an expense ratio of 1.85% compared to SSEMX at 1.25%. If I wanted to buy an ETF, I would pay $10 for the transaction, not pay some fund manager 1.85% annually to do it for me. And though TWMIX has been on fire recently, it is making up for lost time as it trails SSEMX over 5 years. If you want to chase hot returns, feel free to look into TWMIX. But TWMIX's high expenses and turnover steer me away. money

So the other funds I originally pulled up also have expenses 1.75% or higher. MEMEX has a 3 star rating while SSEMX has 4. money

And UMEMX has trailed the average Emerging Markets fund recently.


SSEMX with low expenses and a good long term track record looks like the best offering for this portfolio. money

Non-Retirement: Mid Cap Value Mutual Fund

Wylie Pick: Marshall Mid Cap Value Inv MRVEX

Selecting from mutual funds available through Etrade with no load or transaction fee and an initial $2500 investment or lower minimum and subsequent $100 or lower minimums, when looking for a Mid Cap Value fund, I use the Mutual fund screener to screen out options with 4 or 5 stars and find 4 options. money

I'm bummed about this pick. When I am done building the entire hypothetical portfolio I'll note which ones I own and which different fund I own instead, if I don't own the one recommended for this portfolio. In each case I am picking a fund I own or one I would buy instead if I was looking for a fund in that category today. With this category I will be noting that I own Janus Mid Cap Value Inv (JMCVX). I wish it was still open to new investors so I could recommend it. It has cheaper expenses and good long term performance. money

Actually, I do not think this fund is closed. Morningstar makes no mention of it being closed. More to the point, Janus does not indicate they have closed this fund on their site. The Janus Small Cap Value fund is closed. And the Mid cap fund is huge as far as how much money it has under management so I would not personally be disappointed if it did close. But folks... closed it ain't. money

Here is Etrade's info for fund JMCVX:


If anyone wants to call Etrade's customer service, and try to get to the bottom of this, feel free, but I would not expect much success. In fact, if this kind of discrepancy drives you nuts, you may want to pick a different brokerage as I find this kind of inconsistency on a pretty consistent basis with Etrade (of course I have not used a brokerage that I would recommend instead of Etrade as long as you meet the minimum balance requirements). I do find though, that the inconsistencies are consistently inconsistent. By that I mean, they may be wrong about the fund being closed, but I bet they are wrong about it throughout their site including the tool that would actually allow or restrict your purchase. money

Anyway, one of the 4 funds available for purchase, is not your general Mid Cap Value fund. Fortunately its title indicates this: Icon Materials (ICBMX). Looking at the Industry allocation, you can see that this fund is focused on the Materials sector. If I add sector funds to this hypothetical portfolio, I will check this out again. money


The remaining three funds have similar returns. But only one of the three (MRVEX- The one in the middle!) is solidly invested in Mid Cap companies (Medium Market Capitalization) while the other two (SMCDX and HRSVX) have more invested in non-medium size companies than they do in medium sized ones. money


Fortunately it also has the lowest expense ratio so that makes it an easy choice since we are building a portfolio of funds that are more or less true to their categories and have lower than average expenses: Marshall Mid Cap Value Inv (MRVEX). money

Non-Retirement: Foreign Large Cap Growth Mutual Fund

Wylie Pick: Janus Overseas JAOSX

Selecting from mutual funds available through Etrade with no load or transaction fee and an initial $2500 investment or lower minimum and subsequent $100 or lower minimums, when looking for a Foreign, Large Cap Growth fund, I include higher than normal expenses and turnover in the Mutual fund screener to find seven options. money

One of the seven funds is picked by Etrade as an "All Star" fund. Basically Etrade identifies funds they like in each category and flags then as All Stars. Several of my picks so far have also been picked by Etrade as All Stars but in this case, I think there is a better option. They recommend Excelsior International (UMINX). I like Janus Overseas (JAOSX). money

Etrade's pick has a 'moderate' risk assessment while the Janus fund is assessed as 'high' risk.

Just to be clear- investing in this category can be a wild ride. But despite the assessment that UMINX has less risk than JAOSX, the worst one year performances show that UMINX has had a worse one year downward run (-27.43) than JAOSX (-23.89). money

And Janus has been very well rewarded for its approach. I by very well I mean spectacularly rewarded. money

Since the Janus fund has crushed the Excelsior fund in every period- most importantly the 10 year period, it would have to have pretty high expenses or high turnover or a new manager or something significant to make me think twice about not choosing a consistent winner like this. I do not anticipate that future returns will be this good but a fund with a long track record of tremendous performance has a lot going for it. money

Turns out JAOSX has 5 stars from Morningstar, UMINX gets 4. JAOSX has lower expenses: 0.9% compared to 1.5%! JAOSX does have higher turnover- it is 62% compared to UMINX's 26%. The other 5 Foreign Large Cap Growth funds that came up in my search have turnover ranging from 72% to 138%, all higher than JAOSX so I do not mind a little more churn if the performance is this much better. money

Janus Overseas' manager Brent A. Lynn took control of the fund on 01-01-2001. Check out this chart (From Yahoo) and look at this manager's first two years! That must have been rough. money


The manager of the Excelsior fund has not been at the helm for quite as long but he also started in 2001. money

So crushing returns, the lowest expenses, etc. The Wylie pick is Janus Overseas JAOSX.

Non-Retirement: Bond Short-Term

Wylie Pick: American Performance Short Term Income APSTX

Selecting from mutual funds available through Etrade with no load or transaction fee and an initial $2500 investment or lower minimum and subsequent $100 or lower minimums, when looking for a Short-Term Bond fund, I have five options. money

Two options have a 5 star rating from Morningstar. They are both American Performance funds but one is called "American Performance Interm Bond Fund." This caught my eye because Intermediate Bonds are held for a longer term and ahve their own category and after jumping over to morningstar, I find that in December of last year, this fund switched from the Intermediate category to Short-Term. money

Since I am looking for a Short-Term fund, I rule this one out as an impostor but it illustrates an issue- funds with categories in their titles can be deceptive when a category changes but the title does not. money

So that leaves one 5 star fund and since it has low expenses, American Performance Short Term Income APSTX is our pick. money