In this blog we have developed a series of articles on mutual funds, since these should be the main investment vehicle of individual investors.
We also said how investors should choose and select mutual funds.
In a way that this theme is clearer and more useful for investors, we wanted to present some of the main mutual funds, as an example and for reference to their characteristics.
There are tens of thousands of mutual funds worldwide. That’s over 8, 000 in the U.S. alone.
Even only for the main categories of funds, such as stocks or bonds, global or developed countries, there are thousands.
In addition, it is necessary to meet that not all funds are available for distribution in the country of each investor.
The Best Of Mutual Funds is a series that presents some of the main mutual funds marketed in the world, grouped by categories (see information note at the end of the article).
To facilitate the analysis and selection of the investor, in each of these articles we group mutual funds by types or categories, registration countries and currency denomination.
This Best Of is not intended, nor does it constitute a recommendation. It is a sample of some of the largest funds in each category. There are other funds that may have similar features and be better than these.
Thus, given the available offer, it is up to each investor to decide which funds will be best suited to their case.
There are many other funds with the same investment market traded in the Euro Zone of these and other management, passive management and active management companies.
In the selection the investor should consider the commissions, the track-record of the fund in terms of profitability and risk, and the size and reputation of the management company.
In the Tools folder, a summary form containing a summary description of the main characteristics of the main funds of each category is also presented.
Mutual funds covered in this article: iShares Core Euro Corporate Bond UCITS ETF; iShares € Bond Corp ESG UCITS ETF; iShares € Govt Bond 3-5yr UCITS ETF; Vanguard EUR Corporate Bond UCITS ETF; Vanguard Euro Investment Grade Bond Index Fund; Vanguard Euro Investment Grade Bond Index Fund; Xtrackers Eurozone Government Bond UCITS ETF 1C
Bond funds are part of any individual investor’s investment portfolio because they promote diversification through income stability.
Investors should encourage investment in funds with an investment grade credit rating, which are denominated in their treasury currency in order to avoid foreign exchange risk and their volatility.
These investment funds for Eurozone investors are some of the largest funds that have as their object a diverse set of such bonds and are traded in those countries.
Fund: iShares Core Euro Corporate Bond UCITS ETF
Ticker: IEAA
ISIN: IE00BF11F565
Assets under Management (AuM): $8.7Bn
TER: 0.20%
Benchmark: Bloomberg Euro Corporate Bond Index
Currency: EUR
Domicile: Ireland
Income: Distribution
Registered countries: Austria, Germany, Belgium, Chile, Denmark, Spain, Finland, France, Netherlands, Ireland, Italy, Liechtenstein, Luxembourg, Norway, Poland, Portugal, United Kingdom, Czech Republic, Saudi Arabia, Singapore, Slovak Republic, Sweden, Switzerland
Link: https://www.ishares.com/uk/individual/en/products/290619/ishares-core-corp-bond-ucits-etf
Morningstar Rating: ***
Fund: iShares € Corp Bond ESG UCITS ETF
Ticker: SUOE
ISIN: IE00BYZTVT56
Assets under Management (AuM): $2.5Bn
TER: 0.15%
Benchmark: Bloomberg MSCI Euro Corporate Sustainable SRI Index
Currency: EUR
Domicile: Ireland
Registered countries: Austria, Germany, Belgium, Chile, Denmark, Spain, Finland, France, Netherlands, Ireland, Italy, Liechtenstein, Luxembourg, Norway, Poland, Portugal, United Kingdom, Czech Republic, Saudi Arabia, Singapore, Slovak Republic, Sweden, Switzerland,
Link: https://www.ishares.com/uk/individual/en/products/297933/ishares-corp-bond-esg-ucits-etf
Morningstar Rating: ***
Fund: iShares € Govt Bond 3-5yr UCITS ETF
Ticker: IBGX
ISIN: IE00B1FZS681
Assets under Management (AuM): $2.0 Bn
TER: 0.20%
Benchmark: Bloomberg Euro Government Bond 5 Year Term Index
Currency: EUR
Domicile: Ireland
Income: Distribution
Registered countries: Several Germany, Belgium, Chile, Denmark, Spain, Finland, France, Netherlands, Ireland, Italy, Liechtenstein, Luxembourg, Norway, Poland, Portugal, United Kingdom, Czech Republic, Saudi Arabia, Singapore, Slovak Republic, Sweden, Switzerland, Austria
Link: https://www.ishares.com/uk/individual/en/products/251736/ishares-euro-government-bond-35yr-ucits-etf
Morningstar Rating: ***
Fund: Vanguard EUR Corporate Bond UCITS ETF
Ticker: VECP
ISIN: IE00BZ163G84
Assets under Management (AuM): $0.9Bn
TER: 0.09%
Benchmark: Bloomberg Euro-Aggregate Corporates Index
Currency: EUR
Domicile: Ireland
Income: Distribution
Registered countries: Miscellaneous
Link: https://fund-docs.vanguard.com/ie00bz163g84-en.pdf
Morningstar Rating: ***
Fund: Vanguard EUR Eurozone Government Bond
Ticker: VGEA
ISIN: IE00BZ163H91
Assets under Management (AuM): $1.3Bn
TER: 0.07%
Benchmark: Bloomberg Euro-Aggregate Treasury Index
Currency: EUR
Domicile: Ireland
Income: Distribution
Registered countries: Miscellaneous
Link: https://fund-docs.vanguard.com/ie00bz163h91-en.pdf
Morningstar Rating: ***
Fund: Vanguard Euro Investment Grade Bond Index Fund
Ticker: I23044EU
ISIN: IE00B04FFJ44
Assets under Management (AuM): $1.3Bn
TER: 0.12%
Benchmark: Bloomberg EUR Non-Government Float Adjusted Bond Index
Currency: EUR
Domicile: Ireland
Income: Distribution
Registered countries: Miscellaneous
Link: https://fund-docs.vanguard.com/ie00b04ffj44-en.pdf
Morningstar Rating: ***
Background: Xtrackers Eurozone Government Bond UCITS ETF 1C
Ticker: QW1A
ISIN: LU0290355717
Assets under Management (AuM): $2.0Bn
TER: 0.15%
Benchmark: iBoxx Euro Sovereigns Eurozone index
Currency: EUR
Domicile: Ireland
Income: Accumulation
Registered countries: Austria, Netherlands, Denmark, Norway, Finland, Portugal, France, Spain, Germany, Sweden, Ireland, Switzerland, Italy, United Kingdom, Luxembourg
Link: https://etf.dws.com/en-gb/LU0290355717-eurozone-government-bond-ucits-etf-1c/
Morningstar Rating: ***
The following are links to all the mutual funds mentioned:
https://www.ishares.com/uk/individual/en/products/290619/ishares-core-corp-bond-ucits-etf
https://www.ishares.com/uk/individual/en/products/297933/ishares-corp-bond-esg-ucits-etf
https://www.ishares.com/uk/individual/en/products/251736/ishares-euro-government-bond-35yr-ucits-etf
https://fund-docs.vanguard.com/ie00bz163g84-en.pdf
https://fund-docs.vanguard.com/ie00bz163h91-en.pdf
https://fund-docs.vanguard.com/ie00b04ffj44-en.pdf
https://etf.dws.com/en-gb/LU0290355717-eurozone-government-bond-ucits-etf-1c/
Informational/explanatory note:
In this series we will present many of the best mutual funds available in the various geographies for the individual investor, by each category and in a structured way.
There are tens if not even hundreds of thousands of mutual funds available worldwide.
It would be unthinkable to analyze even the vast majority of them.
That is why it is necessary to establish criteria to focus the analysis.
The criteria we have taken up are as follows:
- Grouping by categories of funds;
- Superior performance in terms of profitability and risk, whenever possible using the rating;
- Availability and accessibility for the investor;
- Size and reputation of management companies.
The various funds are classified by several multiple categories in terms of their investment object:
- 4 main categories per asset, including stocks, bonds, blend or balanced, and others;
- 7 categories by geography, covering global, regional (US, Europe, Emerging Markets, Japan, the UK and Germany);
- 2 categories in relation to the management model, active or passive.
In this sense, at the limit we could have up to about 56 categories (=4x7x2), but we will only cover the most important ones.
We also want to address other important factors such as the availability of mutual funds to the individual investor of the various countries of the world (domicile or origin of the investor) and the currency of denomination.
As we have seen in another article, the investment in stocks must be made in the investments currency (i.e. the securities that constitute its object or destination), while the investment in bonds must be made in the investor’s currency (from the treasury of the funds or from the origin).
We start with actions, in the two largest geographies, world and USA, and addressing for each the two management models.
Next we move on to the obligations, to 3 geographies, world, USA and Eurozone, also covering the 2 management models.
Then we’ll look at the following.
For each case, we will consider the availability of funds in the investor’s home or origin market, seeking to serve the American and European markets (giving note of access by other countries whenever possible).
For each fund, we present its main practical characteristics, in order to allow easy identification, knowledge and investment, namely the designation, the value of assets under management, the country of domicile, and a link to the most detailed information.
The ticker or stock symbol is an abbreviation used to uniquely identify the publicly traded securities of a particular company on a given stock market.
The ISIN or International Securities Identification Number is a 12-digit alphanumeric code that identifies a specific security.
CUSIP is a unique identifier representing the Committee on Uniform Securities Identification Procedures and is used to identify securities registered in the U.S. and Canada.
The expense ratio is the rate of management fees associated with the administration of mutual funds.
There are other costs associated with investing in funds, such as trading fees, legal fees, audit fees, and other operating expenses (e.g. deposit and custody of securities).
The sum of all fees associated with investment in funds is called a total expense ratio and, as we have seen in other articles, it is very important in the analysis and selection of funds.
