Mutual Funds For College

    A mutual fund is one of the choices that can be used as an investment tool towards meeting ones financial objectives. A mutual fund is a grouping of stocks blended together.  The main advantage is that an investor can have the opportunity to invest in more stocks at once, then by buying the securities outright, because with a mutual fund investors buy shares of the fund and not the individual stock.  For my college savings, I chose the Canada Fund (FICDX) and the U.S. Global Accolade Eastern Europe Fund (EUROX).

    At a time when commodity prices are going up, Canada provides an opportunity to participate in the country’s current robust economy. The FICDX provides international exposure, for a developed country with an abundance of natural resources.  About 80% of the assets in this fund are invested in Canadian issuers and securities that are tied to the country’s economy. Not more than 35 % of the fund is invested in any one industry, at any given time.

    In the EUROX, at least 80% of assets are invested in the common stocks of companies located in the emerging markets of eastern Europe.  The emerging markets in eastern Europe are an up and coming center of high–tech, low cost manufacturing with a well–educated workforce. These markets also attract many of the world’s most prestigious companies to set up manufacturing business there.  No, it’s not China – or anywhere in the Asia Pacific. It is, in fact, Eastern Europe – where privatization sees tremendous growth opportunities and is taking advantage of those opportunities with a solid business presence and strategy.

    The major differences between both funds are their country of origin, and the sectors of markets that make up their profile.  The FICDX is heavily invested in commodities (i.e. oil, paper, coal, maple syrup, lumber).  EUROX is driven on emerging markets such as Russia, Poland, Czech Republic, Hungary, and Turkey.  Funds are given a rating within various categories from Morningstar, a mutual fund rating system. FICDX is listed under the Foreign Large Blend category.  The EUROX is listed within the European Stock category.  The differences between funds are important, in determining if the fund’s strategy is a viable investment option for my college savings.  

    There are certain similarities between both funds. According to Morningstar the FICDX and the EUROX, both seek long-term growth of capital. Both funds have inherent risks because of political and economic uncertainties, interest rates, as well as each country’s currency fluctuation.  Investment potential for each fund is promising and believed in the long-term to outperform the U.S. markets overall. Both FICDX and EUROX, offer a tremendous opportunity for long-term growth. They would make an excellent place for my savings toward paying for my college education.

 

Bibliography

 

“Eastern Europe: An Emerging Market.” 2005-2007. Arrow Electronics, Inc. 11/27/07. <http://www.arrow.com>.

“Fidelity Canada Fund.” Copyright 1998-2007. FMR Corp. 11/26/07. <http://www.personal.fidelity.com


Page Information

  • 7 months ago [history]
  • View page source
  • You're not logged in
  • No tags yet learn more

Wiki Information

Recent PBwiki Blog Posts