Bargain-Hunting Funds at a Bargain-Hunter's Price
These low-expense, low-minimum offerings focus on inexpensive stocks.
The stock market may have hit a rough patch these past few weeks, but stocks remain fairly valued in aggregate, according to Morningstar's equity analyst team. Given the uncertain environment, it makes sense to focus on investments where there still may be upside potential. And if you're investing via mutual funds, it pays to extend that bargain-hunting mind-set by honing in on reasonably priced offerings. After all, if returns are constrained in the future, every basis point counts.
With thrift in mind, we used the Premium Fund Screener to screen our database for funds that appeal to budget-conscious investors on three levels: They have reasonable investment minimums, their costs are low, and they focus on cheap stocks.
We started with the value stock-fund categories, sifting through the distinct portfolios of small-, mid-, and large-value domestic stock offerings that were open to new investments of $3,000 or less. We layered on some expense screens and purchase criteria, kicking out load funds and offerings with expenses greater than 1.00%. Keeping in mind that value managers typically stick to a buy-and-hold strategy that demands a fairly long time horizon for their bets to play out, we didn't focus on short-term performance but did look for offerings whose 10-year returns rank in the top quartile during the trailing 10-year period. Finally, we required that managers have helmed the fund for at least five years. Premium Members can replicate this screen by clicking here. The screener yielded 19 funds as of March 22, three of which we highlight below.