Morningstar rating: 3 stars
Total 12-month return: 28.94%
Total 5-year annualized return: 17.33%
Morningstar 5-year risk rating: 0.98
Smallest initial purchase: $1,000
Smallest automatic investment: $1,000
Telephone number: 800-446-6662
LONG-TERM-BOND FUNDS
These funds concentrate on bonds with maturities of 10 years or longer, making them a higher-risk investment.
Strong Corporate Bond
The fund seeks to maximize current income by making some fairly aggressive investments in taxable long-term bonds, as well as dividend-paying common stocks (typically utilities). Be prepared -- as much as 25% of its holdings can go into junk bonds and other investments that use various option techniques.
Morningstar rating: 4 stars
Total 12-month return: 6.88%
Total 5-year annualized return: 10.70%
Morningstar 5-year risk rating: 0.88
Smallest initial purchase: $1,000
Smallest automatic investment: $50
Telephone number: 800-368-1030
Invesco Select Income
The target is a high level of current income, so this fund makes some risky plays. Only 50% of its assets must go into investment-grade corporate securities (the rest can go into debt rated as low as B); U.S. government securities help balance out the mix. It's particularly vulnerable when investors get recessionary jitters.
Morningstar rating: 5 stars
Total 12-month return: 5.16%
Total 5-year annualized return: 9.53%
Morningstar 5-year risk rating: 0.68
Smallest initial purchase: $1,000
Smallest automatic investment: $50
Telephone number: 800-525-8085
Babson Bond "L"
This one's a safer play for investors who want some measure of stability as well as current income. At least 80% of its assets go into U.S. government obligations and investment-grade corporate debt, with a smaller portion reserved for upper-end junk bonds or high-quality Canadian investments.
Morningstar rating: 4 stars
Total 12-month return: 3.72%
Total 5-year annualized return: 7.73%
Morningstar 5-year risk rating: 0.93
Smallest initial purchase: $500
Smallest automatic investment: $100
Telephone number: 800-422-2766
USAA GNMA
If you're a niche player at heart, consider this fund, which invests at least 65% of its assets in certificates of the Government National Mortgage Association. (That means mortgage-backed securities, which do have a tendency toward roller-coaster performance.)
Morningstar rating: 4 stars
Total 12-month return: 3.65%
Total 5-year annualized return: 7.31%
Morningstar 5-year risk rating: 0.84
Smallest initial purchase: $3,000
Smallest automatic investment: $1,000
Telephone number: 800-383-8722
INTERNATIONAL/WORLDWIDE FUNDS
These funds allow investors to diversify into international equities and bond offerings. Funds differ widely in countries and investment mixes.
Janus Worldwide
The heavy-duty research capabilities of this fund, which aims for long-term growth as well as capital preservation, have paid off by consistently identifying profitable industry trends abroad. Expect its portfolio to be distributed among at least five countries, including the United States, with investments in a range of securities.
Morningstar rating: 5 stars
Total 12-month return: 38.43%
Total 5-year annualized return: 20.48%
Morningstar 5-year risk rating: 0.72
Smallest initial purchase: $2,500
Smallest automatic investment: $500
Telephone number: 800-525-8983
Founders Worldwide Growth
This fund has a go-go trading style, with less attention paid to currency and country trends than to the search for stocks that are on their way up. The goal is long-term growth of capital, the investment vehicle is usually common stock, and diversification tends to fall into three or more countries.
Morningstar rating: 3 stars
Total 12-month return: 24.66%
Total 5-year annualized return: 15.04%
Morningstar 5-year risk rating: 0.93
Smallest initial purchase: $1,000
Smallest automatic investment: $50
Telephone number: 800-525-2440 USAA International
This fund's big selling point is its broad international exposure, with holdings typically spread over more than 30 countries. It has a great record of catching the wave in emerging markets. At least 80% of its assets go into stocks based outside the United States.
Morningstar rating: 3 stars
Total 12-month return: 19.71%
Total 5-year annualized return: 13.13%
Morningstar 5-year risk rating: 0.97
Smallest initial purchase: $1,000
Smallest automatic investment: $1,000
Telephone number: 800-382-8722
Twentieth Century International Equity
We're talking capital growth -- and this fund's two portfolio managers are betting heavily that it can come from Japanese stocks (in which 29% of its assets currently are invested). With a mandate to put at least 65% of holdings outside the United States, this is a fund that's not afraid to take some risks.
Morningstar rating: 3 stars
Total 12-month return: 17.13%
Total 5-year annualized return: 12.79%
Morningstar 5-year risk rating: 0.94
Smallest initial purchase: $2,500
Smallest automatic investment: $50
Telephone number: 800-345-2021
*Funds within categories are listed in the order of their five-year annualized returns. All information is as of May 31, 1996.
