Penny-Pinchers' Funds

Despite claims by some mutual fund salespeople that high expenses somehow equate with superior performance, data from TheStreet.com Ratings indicate that those who penny-pinch can do quite well in risk-adjusted returns.

TheStreet.com Ratings' database of open-end stock funds was screened to filter out new and unstable funds with less than $1 million in total net assets. We also included retail funds with initial investment requirements of no more than $50,000.

The 10,555 remaining funds were then reviewed to see how expense ratios and asset size affect our ratings grades, which are based on risk-adjusted returns. (All portfolio classes were counted as individual funds in the study.) ...