Top 5 Transamerica Funds

Investing News

Retirees looking for dependable income during their golden years can no longer rely on money market funds and certificates of deposit (CDs) since the interest rate is too low to make them a viable primary savings instrument for retirement.

Instead, a key to combating increasing costs of living is the smart diversification of funds. Transamerica offers a lineup of 228 funds as of 2022. These five funds can create a well-diversified nest egg that will last you throughout retirement.

Transamerica Intermediate Muni Fund (TAMUX)

This bond fund provides tax-free income from municipal government bonds across the United States. The average maturity of the bonds is 12.24 years, while the average duration is 8.40 years. The credit quality is predominantly AA (60.35%) followed by A (18.33%).

Morningstar has granted this fund two stars, and its expense ratio is 0.63%. Since its inception on Oct. 31, 2012, the fund has consistently outperformed Bloomberg Muni Managed Money Intermediate Index.

Transamerica Sustainable Equity Income Fund (TDFAX)

This fund maintains a smaller number of holdings (35 to 50) in the large-cap space. The goal is to provide total returns through a combination of dividend yield, dividend growth, and capital appreciation.

The largest sectors are financials, industrials, and information technology; most of the holdings are domestic, but about 11.33% are foreign. As a long-term component of a retirement portfolio, it provides a relatively stable income at modest risk. The fund expense ratio is 1.02%, and its Morningstar rating is just one star.

Transamerica Large Cap Value Fund (TWQAX)

The Transamerica Large Cap Value Fund may look similar to the Sustainable Equity Income Fund at first glance, with a small number of predominantly domestic stocks in the large-cap space, but the holdings are significantly different. This fund focuses on value rather than dividends, making it a suitable minority portfolio component for overall capital preservation and growth.

The largest sectors are financials, health care, and industrials, with almost exclusively domestic holdings. The expense ratio is 0.98%. Morningstar gives this fund two stars.

Transamerica High Yield Bond Fund (IHIYX)

This bond fund carries significant risk, but it also provides superior returns compared to safer options. The net asset value (NAV) price history speaks loud and clear—some years, like 2009, which saw a whopping gain of 56.42%, or 2016, which saw 14.13% growth, will make any investors smile.

Other years, like 2008, during which the fund suffered a drop of -25.29%, or 2015, which saw a -4.66% NAV loss, can be difficult. This three-star-rated fund can do wonders toward boosting overall income so long as the portfolio can endure future drops.

The fund has a 30-day SEC yield of 6.47% and boasts a 7.07% annual average return since its inception on June 14, 1985. The holdings are over 80% high-yield junk bonds rated BB, BBB, or lower. The average maturity is 7.30 years, and the average duration is 4.23 years. The expense ratio is 0.99%.

Transamerica Emerging Markets Debt Fund (EMTAX)

Putting a small portion of a nest egg in emerging market debt carries certain risks, but thanks to the global scope, there is limited exposure to any one region. This fund holds about 89% in foreign governments with Mexico (13.93), Indonesia (7.39%), Republic of South Africa (5.02%), and Brazil (4.42%), being the top sovereign holdings.

The remaining debt is spread across multiple sectors in different countries, with foreign government obligation, energy, and utilities being the top sectors. The average maturity is 9.54 years, and the average duration is 5.41 years. The credit quality has a significant spread with 4.29% AA, 7.90% at A, 35.38% at BBB, and the rest at BB or below. The expense ratio is 1.21%.

Articles You May Like

3 Chinese Stocks to Buy When Others Are Very Fearful
Short-Sellers Were Right About Mullen Automotive Stock
7 Penny Stocks That Actually Have Buy Ratings
3 Dow Stocks to Take Seriously in 2023
Expect INTC Stock to Stay in a Slump for Quite Some Time