Meridian Growth Fund (MERDX)

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One of the most well known funds in Kiplinger 25 Best Mutual Funds list is Meridian Growth fund. This fund is not only because it has the highest Morningstar rating (5 stars), it also gets variety of recognition from financial magazines such as Money Magazine, Barron’s, Morningstar, Kiplinger, MarketScope, and Investor’s Business Daily. The following is the details about this best fund.

Meridian Growth (Ticker: MERDX)

As part of Mid Cap fund class, the Meridian Growth fund is seeking for capital growth in long-term. The fund invests its net assets in a diversified portfolio of U.S. Companies’ common stocks that are traded publicly. It invests in securities of companies with any capitalization across a broad range of industries including companies that have small total assets, earnings or revenues. Besides that, MERDX may invest up to a quarter (<25%) of its net assets in foreign companies’ securities, include emerging market companies.

MERDX Fund Details
Meridian Growth Fund (MERDX)
Meridian Growth Fund
  • Fund Inception Date: August 1984
  • Ticker Symbol: MERDX
  • CUSIP: 589619105
  • Beta (3yr): 0.96
  • Rank in category: 85
  • Category: Mid-Cap Growth
  • Distribution: 0.14%
  • Capital Gains: 1.09% (last distributed in 2008)
  • Number of Years Up: 23 years
  • Number of Years Down: 3 years
updated on 06/01/2011

This fund is managed by Richard F. Aster since 1984. During his 26 years managing MERDX, Aster has brought this fund with 23 years in positive territory and 3 years in negative territory. The best fund performance occurred in 2003 (recorded in 47.90%) and the worst performance was in 2008 (recorded in -30.35% which is still better than any index performance). The fund has a 5-stars Morningstar return rating with 6.21% year-to-date return as of April 2011. The 3-year load adjusted returns of this fund is 14.16%. The fund expense ratio is 0.84% per year, relatively low compared to the average of the category which is 1.42%.

This mid cap growth fund is available to any new investor with brokerage accounts (i.e. not available to IRA account). To invest in this Meridian Growth fund, investor or trader will need to provide $1,000 initial balance to fund this purchase. Then, investor can invest $50 min to subsequent investment. This fund doesn’t have any management fee or any sales load. The MERDX fund can be purchased from 48 brokerages, include Fidelity Retail FundsNetwork, JP Morgan, T. Rowe Price, DATALynx, Commonwealth, etc. There is no other class for this fund. The fund turnover rate is 37%.

The top 10 holdings of this best mid cap fund as of December 31, 2010 are Royal Caribbean Cruises, Ltd., Bank of Hawaii Corp., American Tower Corp. Class A, T. Rowe Price Group, Inc., Waste Connections, Inc., Affiliated Managers Group, Inc. Willis Group Holdings Plc (United Kingdom), Valspar Corp., RPM International and J.B. Hunt Transport Services Inc. The top 5 sectors of this fund are Tech-Software (14.9%), Retail (9.9%), Technology (7.5%), Energy (5.7%) and Brokerage & Money Management (5.0%). The majority (44.50%) of the assets is allocated in U.S. equities and 20% in International Equities.

Pros:
  • Good long term performance
  • Low portfolio turnover rate

Investing in mutual fund involve investment risks. These risks include
  • General risk – fund may under-perform under some market condition
  • Investment style risk – There is no guarantee this type of investment style will outperform overall stock market
  • Equity securities risk – Company’s stock may fluctuate depending on historical, prospective earning, assets value, economic condition, interest rates, etc
  • Market risk – fund value may fluctuate depending on individual companies’ activities, economic condition, etc
  • Income risk – fund dividend will depend on payments of dividends from the invested companies
  • Small company risk – This fund may invest in small companies, usually these companies may be more volatile than other larger companies
  • Foreign company risk – Some assets may be invested in foreign companies. Investing in these companies involves risk such as accounting, auditing, currency fluctuations, etc 
  • High yield bond risk
  • Debt securities risk – this is subject to credit risk, interest rate risk, and liquidity risk. 
Disclosure: No Position

update on 5/28/2012

This Meridian Growth fund has a dividend yield of 0.14%. The total net assets are $2.7 billion. Its expense ratio is 0.81%. This mid cap growth fund opens to new investors.

As of April 2012, the top 8 stocks are Advance Auto Parts Inc, Valspar Corp, SBA Communication Corp, East West Bancorp Inc, Coach Inc, Family Dollar Stores Inc, Mohawk Industries Inc, and CarMax Inc.

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