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 In this review we're going to take a closer look at Federated Mutual Funds or simply Federated Funds. When researching this family of mutual funds we couldn't help but noticed that the top performers for this company included a combination of institutional mutual funds and those targeted to the individual investor - a good mix when doing a review.
Federated Family of Funds
Federated Investors has been servicing the financial community since 1955 and serves investors both in the United States and around the world. Federated is one of the top ten mutual fund families with approximately $276 billion in assets under management. Federated offers investors over 150 domestic and international equity, fixed income and money market mutual funds.
Federated supports their clients via a network of 5,400 financial intermediaries and institutions as well as 150 investment team professionals. Federated also stands ready to provide customized account management to high net worth individuals. Federated offers a well rounded portfolio of solutions including 401k plans, Roth and traditional IRAs and "bundled" retirement plans.
In recent years, Federated acquired over $19 billion in assets from Alliance Capital Management and over $265 million in assets from Banknorth Investment Advisors. In 2003, Federated was added to Standard and Poor's 500 Index.
Federated Funds Fee Structure and Returns
Morningstar ratings indicate that the expense ratios for mutual funds at Federated range from above average for their international stock funds (2.04%) to average for their municipal bond funds (0.91%). Federated offers an investors a fairly nice choice of asset class, with taxable bond funds (27%) and domestic stocks (54%) comprising most of that mix.
The minimum individual investment is $1,500, although some institutional funds have minimum investment requirements as high as $100,000. Like PIMCO Mutual Funds, Federated offers investors a mix of load funds (76.7%) and no-load mutual funds (23.3%). As of the end of August 2006, the average return on the family of funds at Federated was 4.90%.
Top Rated Federated Mutual Funds
The top rated mutual funds at Federated offer investors a nice mix of government bond funds, mortgage funds and a conservative securities portfolio. Two of the three funds carry a front load ranging from 1.00% to 5.50%, so not all of you money is put to work right away. So without further delay, here is the list of the top rated mutual funds from Federated:
- Federated InterContinental A (RIMAX) - with over $414 million in assets, this large foreign blend fund specializes in the industrial materials and consumer goods. Top holdings include Taiwan Semiconductor Mfg., Norsk Hydro (Norway), and Orkla (Norway). The expense ratio is 1.70% and the fund carries a front-load of 5.50%. The minimum investment is %1,500 and the average return over the last five years is 27.20%. (November 2007)
- Federated Mortgage Institutional (FGFIX) - with over $365 million in assets, this institutional fund specializes in high quality government mortgage funds (90% of assets). Top holdings for this fund include bonds from Freddie Mac and Fannie Mae. The expense ratio for this mutual fund is 0.33% and the minimum investment for this no load fund is $100,000. The average return of the fund over the last five years is 4.12%. (November 2007)
- Federated Bond F (ISHIX) - with assets of over $1 billion, this is one of the larger bond funds at Federated. The concentration here is on bonds with ratings of A (22.75%), BBB (31.2%) and B (23.7%). Top holdings include a High Yield Bond Portfolio and US Treasury Notes. The fund carries a front load of 1.00% as well as a deferred load of 1.00%. The expense ratio is 1.02% and the minimum investment for this fund is $1,500. The fund's average return over the past five years is 6.94%. (November 2007)
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