Mutual funds produce some useful handouts

Your Funds

Your Money

July 25, 2004|By Charles Jaffe

MUTUAL FUND firms may keep investors in the dark about their inner workings, but when it comes to educating consumers on how to operate an investment portfolio, they are quick to offer information.

When I asked fund companies for their top handouts, more than 30 firms sent more than 300 pieces.

The moral of this adventure is that it's worth contacting your fund company for educational materials. The return on that phone call will be sound guidance from a name you trust.

In searching for the best educational printouts the fund world has to offer, it was easy to find goodies explaining everything from basic investing to complicated asset allocation. My review didn't find a single piece of literature that was invalid, misleading or wrong-headed (though it did find plenty of self-promotion mixed in with the education).

Many of these pieces are available on the funds' Web sites, but there is nothing like holding a brochure or booklet in your hands, so I reviewed printed materials only. All had to be available for free, whether you are a shareholder or not.

Even in a crowd of high-quality information, a few handouts stood out because of the subject matter or the way they approach an issue. I started naming the best pieces last week; here's the rest of the best, by subject:

Wide-ranging investment libraries: The "Plain Talk" series from the Vanguard Group (800-523-7725) is nine booklets on subjects ranging from college savings to financial planning to being a tax-knowledgeable investor. The sales pitch is stripped out of these booklets, and the information is much more in-depth than what most competitors offer.

The "Financial FYI" series from American Century (800-345-2021) and the "Invest Smart" series from OneGroup (800-480-4111) are particularly good resources for novices seeking basic investing information.

IRA rollovers and retirement-plan distributions: In a subject on which seemingly everyone offers free, outstanding help, the standout was the Rollover Planner from T. Rowe Price (800-638-5660). It includes a CD-ROM to walk you through the process of making this key financial change.

T. Rowe Price also scores big points with its "Minimum Required Distributions Guide," the best I saw on a complicated subject that will face almost all investors, namely the correct way to calculate the amount you must remove from your accounts in retirement.

Workbooks and questionnaires: I love tools that allow you to personalize data as you learn about investing. When you finish with them, you wind up smarter, and with a printed guide to taking the next step.

"Investing with a Purpose" from American Century Investments (800-345-2021) gives fundamental investment advice and then lets you complete an investment profile that it matches to a suggested asset allocation. It has useful worksheets on pre-retirement, post-retirement and college savings, built around your answers.

The "Investor Questionnaire" from Vanguard is another worthwhile self-profile/asset-allocation primer.

And the "Goals/Reality" retirement-readiness guide from T. Rowe Price combines multiple worksheets to help you review your plans and tweak them to increase the likelihood of reaching your goals.

Estate-planning and charitable-giving guides: Fund companies desperately want to handle your biggest chunks of money, which is why virtually every fund company - but particularly those firms that sell through brokers - want to help you with estate planning. That's why it's a bit ironic that the two best pieces on the subject were from firms that sell direct to investors.

The "Estate Planning Guide" from T. Rowe Price lets you frame all of the estate-planning issues you're likely to face and points toward the potential solutions (which you might want to reach with the help of an attorney).

The "Guide to Giving" from Fidelity (800-682-4438) is for high net-worth individuals trying to figure out the best way to leave a legacy; it is most valuable for the clear-cut way in which it discusses various giving vehicles.

Proxy-voting issues: While you may not be a social investor - someone trying to improve the world while you enhance your wealth - the issues that are front-and-center with those types of investors may resonate with you.

Further, after regulators required mutual funds to disclose the way they vote proxies on the stocks they hold, you might be curious as to why the issue is so important.

The booklet covering proxy voting guidelines and shareholder activism published each year by the Domini Funds (800-762-6814) is a great read for investors trying to get a handle on the issues. While not a classic make-you-a-more-educated-investor brochure, it's worth a look if you intend to be an active fund owner or if you are considering whether you want to invest in a socially conscious fashion.

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