Plus, Vanguard says 401(k) investors stayed the course in 2008, Macquarie Group buys Delaware Investments, more leveraged ETF warnings, and more.
Morningstar's fund analysts cover 2,000 mutual funds. Their full analyst reports, including Stewardship Grades, are available in Morningstar Principia Mutual Funds Advanced and Morningstar Advisor Workstation Office Edition.
The rising tide has not lifted all tech funds.
Technology stock funds have led the domestic-equity pack in 2009. The average tech fund was up 37.6% for the year through Aug. 19. The top mutual fund in the category, Fidelity Select Electronics
The category's bottom three performers for the year so far have been ICON Information Technology
These are good absolute gains, but these funds are lagging their peers. Top-performer Fidelity Select Electronics has about 25 holdings with stocks that have more than doubled for the year to date. Icon Information has only three. Ivy Science & Technology has more stocks that have doubled this year than Icon has, but it also has a chunk of holdings that are down more than 20%, including non-tech firms like biotech company Genzyme
401(k) Investors Hold Steady
The investing hoi polloi get a lot of grief for being unsophisticated and fickle, but more evidence emerged this week that most of them may be more long-term focused than many purported experts believe. A study published by Vanguard found that most of the participants in its 401(k) plans continued to invest during the crash of 2008 and early 2009, didn't back away from equities, and avoided the urge to actively trade despite the volatile market. Vanguard examined the actions of more than 3 million participants in the 2,200-plus defined contribution plans the family administers. The study showed that only 16% of participants traded during 2008. Of that, only 2% abandoned equities and the remaining 14% made a variety of other portfolio changes. A few other interesting tidbits:
Macquarie Group Buys Delaware Investments
Lincoln Financial Group
Regulators Issue Leveraged and Inverse ETF Warnings
On Tuesday, the SEC and FINRA issued a joint alert warning investors of the risks of leveraged and inverse ETFs. The notice calls attention to potential confusion on the part of investors about the performance objectives of these ETFs: They are not intended to be long-term investments. They are designed to deliver a multiple of the index they track on a daily basis and their performance over the long term can vary greatly from the ETFs' daily performance. As we discussed earlier this year and most recently in June, most individual investors should avoid leveraged and inverse ETFs.