Web Sites Offer Free Screening Tools That Are Fit for the Pros

Given the choice between paying $495 a year or absolutely nothing for professional mutual fund screening software, who wouldn’t opt for the freebie? Up until recently, though, we didn’t have this choice.

Free fund-screening tools have been around for some time, but most of these Web-based programs have been underwhelming, to say the least. Although many of these programs allowed us to screen for top funds based on simple measures such as total returns or sales commissions, screening for more sophisticated features such as high Sharpe ratios or low standard deviation was out of the question.

That’s all changing now. With so many financial Web sites around, those that want to survive are adding “value-added” bells and whistles to stand out in this increasingly crowded marketplace. The result: “The Internet is putting in individual investors’ hands tools that were privy only to financial planners or professionals before--for free,” says Jonas Ferris, co-founder of MAXfunds.com, a new mutual fund Web site.

Which means now is a good time to hunt for freebies. What’s out there for individual investors?

Well, if you want sheer power--the ability to screen for most every criteria you can think of--check out:

* https://www.moneycentral.msn.com. When it comes to fund-screening, Morningstar gets most of the attention. But MSN’s MoneyCentral may be the best site for free fund-screening.

To mine this information, click on the “investor” section of MoneyCentral. Then, click on the tab marked “finder.”

To screen for funds, you’ll have to download software from the site, but that takes a few minutes at most. And once you do that, you can screen for funds based on hundreds of different criteria. Among them: investment category, performance, 12-month yield, brokerage availability, Morningstar rating, Morningstar risk, portfolio turnover, portfolio holdings, the number of stocks or bonds in the fund, sector weightings, and statistical measures such as alpha, beta, R-squared and even Sharpe ratios.

* https://www.morningstar.com. Recent improvements to this Web site make it an even more valuable tool for fund investors.

You can screen for most of the basics through the “Fund Selector” section of Morningstar.com for free. And no site has a richer database of funds to mine from--and richer information about funds in general. The only downside is, to access Morningstar’s “Advanced Selector” screening tool, which has all the bells and whistles, you have to become a premium member. Price: $9.95 a month or $99 a year.

Other sites worth considering:

* https://www.etrade.com. E-Trade’s site doesn’t have nearly as much power as MoneyCentral’s, but it does give enough to get started. Plus, it’s easy to use and navigate.

Once you get to the online broker’s Mutual Fund Center page, select “Power Search.” There, you can search funds based on fund families, investment objectives, historic performance, assets, minimum initial investments, expenses, turnover and manager turnover. Plus, you can search based on sophisticated statistical measures such as a fund’s alpha, beta, Sharpe ratio and R-squared.

All of this is free. However, to access this data, you must register on the site by submitting your name, phone number and e-mail address. (You do not have to open an account with E-Trade.)

* https://www.smartmoney.com. The personal finance magazine’s Web site offers many of the features of Morningstar’s or MoneyCentral’s fund-screening tools. One difference: Instead of screening based on Morningstar ratings, SmartMoney.com lets you screen for funds based on the magazine’s own proprietary fund-grading system.

If mutual fund expenses and fees matter to you most, check out:

* https://www.mfea.com. This site--run by the Mutual Fund Education Alliance, the no-load fund industry organization--lets you screen not just for funds with low or no sales commissions, but also for funds with low annual expense ratios, redemption fees (assessed if you sell shares a short time after you purchase them) and even 12b-1 fees (the annual amount funds deduct to pay for marketing and distribution costs).

If you don’t know what to screen for, several sites offer pre-constructed screens. Among them:

* https://www.quicken.com. Click on the “investing” tab of this popular personal finance site, and you can access Quicken’s “popular searches.” There, you can look up the best no-load, low-expense funds; the best funds with total assets of less than $100 million; the best large-, mid-, and small-cap funds; and the best funds with low minimum initial investment requirements.

Quicken also has a powerful “Full Search” feature on its site.

* https://www.moneycentral.msn.com. In addition to its custom search function, MoneyCentral offers a plethora of “pre-defined” screens. They’ll help you identify the best “safe and steady” funds, the best tech funds, the best no-load funds with momentum, and funds that recently received additional stars under Morningstar’s star rating system.

Finally, let’s say you want to search for funds that others haven’t discovered yet. Check out:

* https://www.maxfunds.com. A unique feature of this new site’s fund-screening tool, called Fund-o-matic, lets you search for “undiscovered” funds--those that are too new or small to have a ticker symbol, and thus don’t get listed in most newspaper mutual fund listings.

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Do you have ideas for mutual fund and 401(k) topics for this column? Times staff writer Paul J. Lim can be reached at [email protected].