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Chapter 12. Looking for Mr. Goodfund > Investment Options at a Glance - Pg. 123

Looking for Mr. Goodfund 123 The fund charges investors $1.18 on every $100 as a management fee, and there are no 12b-1 fees. These fees make this fund reasonably priced. The fund is sold no-load to all investors, which means that if you like it in our 401(k), you can buy the fund at no additional cost in your IRA or brokerage account. (Its high turnover rate of 81 percent means that you will get hit with capital gains taxes every year if you buy this fund outside a protective shell.) The Annualized Total Return and Growth of $100 figures confirm that this fund has made its shareholders money over the past five years. Van Kampen Emerging Growth A The first thing that you will notice in the Investment Option column is the letter A. This tells us that there are different classifications or class shares of this fund. The fund is about 31 years old and has been managed by Gary Lewis since April 1989. Lewis has been supported by a four-person team of managers since 1996. Given his tenure over the last 12 years, the returns shown are directly due to his management philosophy. The Fund Objective and Fund Category list Emerging Growth as a large-company growth fund. The companies that it invests in can be medium or large, although with a median market capitalization of around $16.6 billion, most of its holdings are in larger companies. Further investigation shows that it tends to stay true to its large-cap growth company, which means that it offers investors a nice way to diversify away from large-company value funds. With a high turnover rate of 110 percent, it is clear that the manager tends to "ring out" the added value in each holding. Long-term commitment to companies is not what this fund is about. Because the fund invests in large growth-oriented companies and is formerly a midcap growth fund, it is categorized as aggressive in our Investor Profile. Morningstar rates this fund at five stars, showing that investors have historically received high returns for the high market risk. And with this fund composed of mostly (91 percent) stocks, this fund will ride the waves of the growth economy, up and down.