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Specialized Funds

10 Mutual Funds for Hard-to-Reach Places

Aaron Levitt Oct 21, 2014



Be sure to also take a look Under the Hood of the 10 Biggest Mutual Funds.


10. Wasatch Emerging Markets Small Cap (WAEMX)


WAEMX is actively managed and seeks to provide long-term growth of capital by investing in emerging market stocks with market caps of less than $3 billion. Top holdings include a host of stocks—like Hotel Shilla & International Container Terminal Services—that the average investor has never heard of.

Over the last five years, WAEMX has produced a 12.29% annual return. Expenses for the fund run 1.95% and the minimum investment is $2,000.

Have you tried taking our quiz, Which Country Has a Higher GDP?


9. Renaissance Capital Global IPO (IPOSX)


This is where mutual funds can get in on the action.

The Renaissance Capital Global IPO (IPOSX) is an actively managed mutual fund that invests in a portfolio of newly public companies at the time of the offering and in post-IPO trading. Using the fund, investors can get in on the IPO action from the very start. Top holdings include Facebook (FB) and EQT Midstream (EQM).

Unfortunately, like the IPO market, IPOSX’s performance has varied wildly and only has a five year average annual return of 7.89%. Both the fund’s expenses and minimum investments are high—at 2.5% and $5,000, respectively—as well.


8. PIMCO Emerging Markets Currency A (PLMAX)


See 10 Ways to Beat Inflation with Mutual Funds.

Like many assets classes on this list, currency trading is an area that is dominated by institutional investors. Regular retail investors—aside from a few dabbling in FOREX trading via specialized accounts—simply don’t have the access.

That is, unless you invest in the PIMCO Emerging Markets Currency A (PLMAX). PLMAX provides emerging market currency exposure by investing swaps or fixed income securities denominated in currencies of non-U.S. countries at zero to two year duration. Expenses include a 3.75% sales charge and 1.25% in operating expenses.


7. ALPS|Red Rocks Listed Private Equity A (LPEFX)


The ALPS|Red Rocks Listed Private Equity A (LPEFX) invests in 30 to 50 private equity stocks or firms that own/operate/invest in various private equity transactions. These include top holdings like industry giants KKR (KKR) and Blackstone (BX). By doing this, investors gain access to the various private equity deals driving these stocks, while still getting liquidity and all the benefits of a mutual fund. Performance for LPEFX has been good, with a five-year average annual return of nearly 14%.

LPEFX—while expensive at 2.35%—is still way cheaper than owning a private equity fund. The minimum initial investment is $2,500.


6. Vanguard Convertible Securities (VCVSX)


The Vanguard Convertible Securities mutual fund (VCVSX) takes care of all of that for regular retail investors.

The fund is actively managed and owns 223 different holdings. Around 8.5% of the fund is in converted stock with the rest still in bonds. Over the longer haul, the mutual fund has been a great performer, with the fund returning 8.02% over the last 10 years. That’s far better than the average bond fund during that time. Expenses are cheap at 0.63%, and the minimum investment is $3,000.


5. Northern Multi-Manager Global Listed Infrastructure (NMFIX)


The Northern Multi-Manager Global Listed Infrastructure (NMFIX) uses a dual manager approach to generate its returns. Dividing its assets evenly among managers Brookfield and Lazar, NMFIX buys various publicly traded firms—both domestic and international—that own a host of infrastructure assets. Top holdings include Japan’s Tokyo Gas and American railroad CSX (CSX). All in all, NMFIX owns 80 different stocks.

In the one year since launching, the fund has returned nearly 17%, more than its benchmark. Expenses run 1.01% and the minimum investment is $500.


4. Voya Senior Income A (XSIAX)


Be sure to read about the 7 Biggest Mistake to Avoid When Investing in Mutual Funds.

The Voya Senior Income A (XSIAX) is one of the oldest mutual funds betting on these types of bonds. Focusing on the top tier of loans, the fund hedges itself against bankruptcy situations.

So far, XSIAX has been a monster performer. Over the last 10 years, the fund has returned 11.45%, beating the average traditional bond fund by around 5% in that time, all while paying an above average dividend. XSIAX does come with a 2.5% sales charge and a 2.03% expense ratio. However, this is one instance where that charge may be worth it for investors.


3. The Merger Investor (MERFX)


The Merger Investor (MERFX) brings the strategy into the average retail investor’s portfolio.

Launched in 1989, MERFX has been one of the top performing mutual funds, and it has achieve this by buying stocks of companies that are about to be bought-out. The fund will only buy deals that have an almost certainty of closing. That allows it to snag-up those 50 cent differences consistently. Since its inception, the fund has produced a 6.69% annual return. That hasn’t outperformed the S&P 500, but it has been a much smoother and more positive ride during that time. Expenses for MERFX run 1.65% and the minimum investment is $2,000.


2. Fidelity International Real Estate (FIREX)


The Fidelity International Real Estate (FIREX) taps into the billions of dollars worth of real estate located outside of the United States.
It does this by buying publicly traded shares of REITs, real estate operating companies (RECs) and other property managers across the global. The vast bulk of its holdings are located in developed market nations, with Japan, the U.K. and Hong Kong as the top holdings. The fund currently owns 68 different firms.

On the returns front, FIREX has managed to produce a 5.99% average annual return. Expenses run 1.14% and the fund’s minimum investment is $2,500.


1. Federated Prudent Bear A (BEARX)


Be sure to read the 10 Biggest Mutual Fund Investing Myths Debunked.

The Federated Prudent Bear A (BEARX) is a dedicated short-only fund with a kicker: it will go long investments in stocks of companies that mine or explore for precious metals or other natural resources. The idea is to create a portfolio that will benefit from a declining U.S. stock market.

Sadly, the last five year bull market hasn’t been so kind to BEARX. The fund has lost an average of nearly 17% over the last five years. That loss, however, shows how uncorrelated the fund’s portfolio is to the stock market.

BEARX is expensive at 1.75% and comes with a 5.75% sales-load.


The Bottom Line


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