5 Transamerica Mutual Funds to Consider

Transamerica, a well-recognized name in the investment world, offers five among its 224 mutual funds that stand out for investors seeking a diversified and durable nest egg.

The five funds, which have holdings ranging from municipal bond funds to emerging market debts, offer a choice of different investment strategies suitable for weathering different economic conditions. In this article, we provide the specifics of each fund and then describe how they can help you form a well-rounded retirement portfolio.

Key Takeaways

• Transamerica is a San Francisco-based financial firm founded in 1906.
• Transamerica’s mutual fund lineup includes a range of asset classes and investment styles.
• Each of the five funds featured presents a distinct risk-return profile, from relatively stable income generation to higher risk-reward potential of growth funds.

1. Transamerica Intermediate Muni Fund (TAMUX)

This bond fund provides tax-free income from municipal government bonds from across the U.S.

Morningstar has granted this fund two stars; its expense ratio is 0.66%. Since its inception in 2012, the fund has consistently outperformed the Bloomberg Muni Managed Money Intermediate Index.

Important

With varied asset classes, geographical distribution, and risk profiles, these funds collectively cater to long-term investment strategies, balancing risk with potential returns.

2. Transamerica Sustainable Equity Income Fund (TDFAX)

This fund holds 35 to 50 companies in the large- and middle-cap space. The fund aims to provide several avenues for returns through a combination of dividend yield, dividend growth, and capital appreciation.

The largest sectors represented are finance, industry, and information technology. Most holdings are domestic. As a long-term slice of a retirement portfolio, it should provide a relatively stable income at modest risk. However, the fund expense ratio is relatively high at 1.03%, and its Morningstar rating is just one star.

3. Transamerica Large Cap Value Fund (TWQAX)

At first glance, the Transamerica Large Cap Value Fund might look like the Sustainable Equity Income Fund, with a small number of predominantly domestic stocks in the large-cap space, but the holdings are significantly different. This fund aims for value over dividends, making it a suitable minority part of a portfolio seeking overall capital preservation and growth.

The largest sectors represented are finance, healthcare, and industry. Almost all holdings are domestic. The expense ratio is 1.0%. Morningstar gives this fund three stars.

4. Transamerica High Yield Bond Fund (IHIYX)

This bond fund carries higher risk but provides superior returns over safer prospects. It has had some outstanding years (e.g., 2016 with 14.13% growth), but that’s been matched by underperforming ones. As of November 2024, its 10-year trailing return was 3.78%, and its year-to-date return was 6.33%.

The fund is rated two stars by Morningstar. It can help boost overall income in your portfolio so long as you can tolerate future drops. The expense ratio is 1.02%.

5. Transamerica Emerging Markets Debt Fund (EMTAX)

Putting even a small part of your nest egg in emerging market debt carries risk, but Transamerica’s Emerging Market Debt Fund has global scope, so there’s limited exposure to any region. The expense ratio is high at 1.25%, and it has three stars from Morningstar.

What Is Transamerica?

Founded in 1906, Transamerica began as a bank and developed into a financial services provider. Transamerica offers a wide array of financial products and services, including retirement products, insurance, and investments. Since 1999, Transamerica has operated under the Aegon Group, a global financial firm, which has strengthened its international presence.

Known for its iconic pyramid-shaped headquarters in San Francisco, Transamerica has an investment arm notable for its extensive range of mutual funds.

How Can I Invest in Transamerica Mutual Funds?

Transamerica’s mutual funds are available to trade on all major brokerage platforms.

Does Transamerica Offer No-Load Mutual Funds?

Yes, Transamerica offers no-load mutual funds. No-load funds do not carry a commission when they are bought or sold. According to Transamerica, about three-quarters of its mutual funds are no-load funds.

The Bottom Line

Transamerica funds offer investors options for building a retirement portfolio tailored to different risk tolerances and investment goals. The funds highlighted—Transamerica Intermediate Muni Fund, Sustainable Equity Income Fund, Large Cap Value Fund, High Yield Bond Fund, and Emerging Markets Debt Fund—provide a blend of stability, growth potential, and income generation. It’s crucial to understand each fund’s unique attributes in order to see how they might fit into your investment strategy—and whether if any would be a good fit for your portfolio.