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Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: Re: Dupree Mutual Funds Date: 1/14/2005 11:28 PM
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The first thing I would do is go to their website. In this case: http://www.dupree-funds.com/ . (I found that by a Google search on 'Dupree Mutual Funds'). Then, I download the prospectus for DUALX and read it. That is the best way to learn the details of any fund.

I never use any ratings of any mutual fund. Ratings always refer to the past, and past success rarely translates into future success when mutual funds are concerned. If you want to find this year's losers, just find last year's winners.

Check to see how long the fund manager has been there. He/she should have been there at least 5 years. The longer the better.

Look for the expense ratio. Compare that ratio to other bond funds (use Morningstar for this). An expense ratio for a bond fund should be pretty low; probably under 0.25%.

Look at the duration. A duration of 5 means that if interest rates go up 1% the price per share of the mutual fund will go down by about 5%. In a rising interest rate environment, you probably don't want to buy long duration funds (even though their yields are higher), because you could lose a substantial amount of value pretty quickly.

Check the quality of the bonds that are held. The lowest investment grade rating is BBB. If you buy lower grades (BB, B, CCC, etc) you are getting into high risk speculating.

Russ
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