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Fund Spy

11 Secrets to Making the Fund Screener Hum

How you can unlock the power of Premium Fund Screener.

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Our Premium Fund Screener is a great way to research funds and even understand the ones that you already own. The more time you put into using it, the more you'll find clever ways to get good results. But what fun is that? To save you time, I'll share some tips that will help you make the most of the screener. (Not a Premium Member? Click here to take a free 14-day Premium Trial Membership.)

1. Secret Data Points
You can view the screener's results through some formatted views, but you can choose a bunch of additional data through the Create Modify/Custom View option in the View drop-down menu on the results page. A few, such as 15-Year Return and Special Fund Types, aren't even available in our fund data pages. Others such as Morningstar Stewardship Grade and Analyst Pick/Pan can be a big help in getting to the right fund. You can even go back and incorporate these data points into your screen.

2. Distinct Portfolios
This one sounds boring, but it will save you grief. When setting up a screen using the Select Data to Screen On drop-down menu, look under the General heading for Distinct Portfolio Only, and then select Yes. This limits your results to just one share class per fund so that you won't be buried under a mountain of tickers and repeated fund names when you go to the results page. Today, some fund shops have 15 or 20 share classes for each fund. Once you've found the best fund, you can always go back and look for the lowest-cost one that you can purchase.

3. Closed to New Investment
Way down in the Select Data to Screen On menu is the Management and Purchase Data section. One option is Closed to New Investment. If you select No for Closed to New Investment, you will exclude all closed funds and thus save yourself the aggravation of finding a fund that meets all your criteria but won't allow you to buy in.

4. No-Load Funds
In the same section as Closed to New Investment, you can screen for no-load funds (if that's what you want) under Fees & Expenses, and here you can also choose an investment minimum to avoid funds beyond your reach.

5. Management
Under Management, you can limit your search to a fund company or an individual manager--something that's a great help if you are homing in on something very specific.

6. The Quick Answer
If you are looking to quickly find the best in a class, you can get there with just two data points. In the Select Data to Screen On menu, under General, pick Fund Category and make your choice. Then, back in the main menu, under General, select Analyst Pick/Pan and opt for Picks in the Value drop-down. Now you've got our fund analysts' selections for the best funds in a category.

7. The Slower Answer
If you want to cast a wider net, though, use a number of tests instead of simply Analyst Picks. Say you want foreign large-growth funds that are no-load, have expense ratios below 1.25%, and have top-third 10-year returns. Those criteria get you down to seven distinct portfolios.

8. Using Returns
In the above example, I used Trailing Return % Rank in Category < 34% (10-year return) because, in our percentile rankings, the lower the number the better. It's tempting to just pick an absolute number or to focus on or ratchet up the test for short-term performance--say top 10% over the past three years. That's the way to ruin, however. You want managers who added value over the long term rather than the best recent returns because otherwise you're effectively eliminating many good managers based on data that can change quickly.

9. Using the Ranking Function
Once you've reached the results page, you can use the rank function to get to the most important results or to gain a new perspective. For example, you could screen on conservative-allocation funds and then use Create/Modify Custom View and choose the Expense Ratio option. Then click the Expense Ratio heading to re-sort, or rank the funds in the list, so that you're starting with the cheapest ones. Or if you want to understand how well a fund company's domestic-stock funds are doing, you could Create/Modify Custom View for a column with long-term relative performance and for a second column with assets, and then rank by assets. Doing this with Fidelity's domestic equity group and three-year returns, I can see that  Fidelity Contrafund (FCNTX) and  Fidelity Low-Priced Stock (FLPSX) continue to do well but  Fidelity Growth & Income (FGRIX) and  Fidelity Disciplined Equity (FDEQX) are struggling.

10. Understanding Performance of a Category of Funds
If you're trying to get a handle on the keys to performance among funds in a category, you can screen by category to see what separated the good from the bad. Try ranking by returns over the relevant period and then looking at the sector weights of those near the top and those near the bottom. Or you can include a sector weight in the screen. For example, you could look at 2008 returns of value funds with more than 25% in financials and then look at them with less than 10% to see how important it was.

11. Understanding Your Fund's Performance
To learn why your fund has turned in the numbers it has, you could screen on a couple of key distinguishing characteristics. Say it's  Tweedy, Browne Value (TWEBX)--a large-cap fund with more in small- and mid-caps than the norm. You know that small caps and mid-caps have beaten large caps this year, and you want to know if Tweedy outperformed those with a similar cap bias this year. You could screen for funds in the large-value category with an average market cap that's less than $15 billion (find this option under Portfolio/Stock Portfolio Statistics in the main drop-down menu) and then rank by year-to-date returns by clicking on that heading in the table. In this case, it turns out that although Tweedy is in the top third of all large-value funds, it's actually subpar within the group of large-value funds biased toward small caps and mid-caps.

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Russel Kinnel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.