Kevin McCormally: I am Kevin McCormally of Kiplinger's. I am here with Manny Schiffres, the Executive Editor of Kiplinger's Personal Finance Magazine to talk about the Kiplinger 25. Manny, I know you are intimately involved in picking the Kiplinger 25, the magazine's favorite mutual funds, but how do you go about whittling down the list from thousands to just 25 funds.
Manny Schiffres: Okay, when we focused heavily of managers. We look for managers who are intelligent, who have outstanding long term results, that are consistent with the risks and who have a sound strategy.
Kevin McCormally: Anything else?
Manny Schiffres: Well, expenses are very important. None of the funds that we recommend levy commissions by the sell, by when you invest and we look for funds with below average expenses.
Kevin McCormally: What kind of the funds do you have in the Kiplinger 25?
Manny Schiffres: Well, the list contains 19 stock funds, 5 bond funds and one commodity fund.
Kevin McCormally: And the commodity fund is new this year.
Manny Schiffres: It is. It is the Pimko Commodity Real Return Strategy fund, we have added it to the list because we think commodity prices are in a long term upward trend.
Kevin McCormally: Anything else new this year?
Manny Schiffres: Well, we have added the Vangaurd Inflation Protecting Securities fund as well. This is a fund that invests in inflation, protected bonds and this should be a good hedge if inflation continues to rise.
Manny Schiffres: Okay Manny how often do the names change on the Kiplinger 25 list?
Kevin McCormally: Well, on average we remove about one-fourth of the names every year, we remove funds if the fund company imposes sales charge, if a fund closes to new investors or if the managers change. We will also remove funds for performance reasons, if they perform poorly for an extended period of time.
Kevin McCormally: Okay Manny, thank you.
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