QikReview: Goldman Sachs High Yield, Morgan Stanley Small Growth

Continuing with the series of (401)k funds reviews, below are reviews of the Goldman Sachs High Yield and Morgan Stanley Institutional Small Growth funds.

Goldman Sachs High Yield (GSHIX)

Category: High Yield Bond
Rating: 4
Capital Gains Exposure: -43%
Assets: $3.128 bil
Expense Ratio: 0.73%
Turnover Ratio: 11%
Yield: 11.77%
Redemption Period: 60 days
Redemption Fee: 2%
3-Year Total Cost: $240
Minimum Investment: $10,000,000
Comments: This fund has 86% in Bonds and 12% in Cash. It holds AAA (14), BBB (5), BB (24), B (44), and Below B (13) quality bonds. The bonds are in the following sectors: Corporate (75) and Foreign Corp (13). This fund performs well relative to it's category. It's ranked in the top 10% for it's category. This is a solid fund that is fairly cheap and is more likely to do well than not. Although I'm not too keen investing into bonds right now, this fund is yielding quite a bit to compensate for that risk.
Grade: B-

Morgan Stanley Institutional Small Growth (MSSGX)

Category: Small Growth
Rating: 4
Capital Gains Exposure: -41%
Assets: $1.055 bil
Expense Ratio: 1.01%
Turnover Ratio: 76%
Yield: 0.0%
Redemption Period: 30 days
Redemption Fee: 2%
3-Year Total Cost: $322
Minimum Investment: closed
Comments: This fund invests into Medium (27), Small (64), and Micro (9) companies. It invests into the following sectors: Healthcare (11), Consumer Services (19), Business Services (25), Financials (6), Consumer goods (11), Industrial Materials (9), and Energy (10). The fund has 65 holdings and keeps 35% of assets in the top ten holdings. This fund's performance is mediocre, but not terrible. It is ranked in the top 20% percent peers for the 10-year period and has returned annualized 7% over that same period. This is an OK fund, but I would prefer to invest in a steller small-cap fund if I were to invest in the small-caps at all. Small-caps are bound to underperform the market in the near future.
Grade: C-

Full List of Current Series of 401(k) Fund Reviews:

• Introduction and Large-Cap Funds - American Funds Growth, Dodge & Cox Stock, Putnam Equity Income, State Street Equity 500 Index Service
• Foreign Large-Cap Funds - AllianceBernstein International, American Funds EuroPacific Growth
• Mid-Cap Funds - Alger MidCap Growth Institutional, Ariel
• Moderate Allocation Funds - Dodge & Cox Balanced, George Putnam Fund of Boston
• Goldman Sachs High Yield, Morgan Stanley Institutional Small Growth
• Fund Picks and Allocation Targets