Most Similar Funds

The Training Corner | by Lars Wasvick, Associate Product Manager of Morningstar

Like any product on the market, if it’s good, a lot of people will buy it. With limited production, that product could potentially sell out. The same principle goes for mutual funds. Oftentimes fund managers will close and reopen their funds, sometimes to all investors, and sometimes to new investors. It depends on the fund company and the assets they have under management. What can you do if there’s a closed fund that you want to invest in?

Turn to Morningstar Investment Research Centers Most Similar Funds Tool. This tool allows you to enter in a mutual fund (like that closed fund you have your eye on) and find the top 50 funds with the closest characteristics. You can also view a number of figures to help you select which fund or funds from that list you’d like to research further.

You can access the tool from the homepage under the Funds heading, or on the left side of any Fund page. To run the search, just enter in the ticker symbol or the name of the fund you are targeting. The tool will search the database for similar funds, and return them for you.

The default screen displays the Morningstar Category and Overall Similarity number. However, you can change the view in the dropdown menu to see how the funds compare in performance, risk, asset allocation, and more. For example, if you are looking for funds with similar asset allocation, change the view and you will get a list of the funds’ positions in cash, equity, bond, and other. This makes it really easy to find comparable investments.

Another nice tool feature is that it links up with the Fund Compare tool. So, by checking off on two of the funds from the list, and clicking the “Go” button at the bottom of the page, you can look at those funds side by side to help you see their differences and compare things like investment style, ratings, and performance.


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