Investment Managers Series Trust II (IMST II) is a mutual fund company that offers a variety of actively managed mutual funds across different asset classes. As one of the largest mutual fund families in the industry, IMST II provides investors access to professional investment managers who aim to outperform benchmark indexes. When considering IMST II funds, it is important for investors to understand the core strengths and weaknesses of this fund family.
Wide selection of actively managed funds
One of the biggest strengths of IMST II is the wide selection of actively managed mutual funds they offer. With over 60 different mutual funds, investors can choose from a diverse set of strategies including U.S. equity, international equity, fixed income, alternatives and multi-asset portfolios. This gives investors the ability to construct a well-diversified portfolio using IMST II funds based on their specific needs and risk tolerance. However, the large number of choices can also be overwhelming for beginning investors.
Mostly higher expense ratios
Since the funds are actively managed, the expense ratios tend to be higher compared to index funds and ETFs. The average expense ratio across all IMST II funds is around 1.1%. However, some of their funds have expense ratios above 2% which can eat into long-term returns. Investors should be aware of the impact of fees and closely evaluate whether the active management is worth the higher costs.
Mixed performance track record
While some IMST II funds have delivered market-beating returns over specific periods, the majority have underperformed their respective benchmarks over longer time horizons. According to a S&P Indices Versus Active (SPIVA) report, 78% of IMST II large-cap funds underperformed the S&P 500 over the past 10 years. This demonstrates the challenge of consistently outperforming as an active manager over the long run. Investors should carefully research individual fund performance and manager tenure before investing.
Relatively high manager turnover
Compared to other large mutual fund companies, IMST II tends to have higher manager turnover across many of its actively managed funds. When portfolio managers depart, the incoming managers often make changes to the funds’ strategy and holdings. Frequent manager changes can lead to higher costs and taxes for investors in those funds. Checking manager tenure and research portfolio manager transitions is key.
In summary, IMST II provides a wide selection of actively managed mutual fund strategies but investors must weigh the pros and cons of higher fees, mixed performance and potential manager changes before investing.