expense ratios If this has been discussed at length already, please forgive me (and someone share the link!) but I wanted to ask you all how much you're willing to pay in expense ratios? Ed's commentary this week made me think of this again.
The conventional wisdom is, the cheaper the better, but with a few funds you really do seem to get your money's worth. According to M*, PDI charges a 2.17% fee after excluding interest expenses. With interest expenses (for leverage), the fee is 3.15%. The advisor fee is 2.10%. Yet it's been a remarkable performer and has outperformed PIMIX, by the same manager, which only charges 0.45%. And that manager, Ivascyn, has been putting his own money into PDI. Of course he, like most of us, could be overestimating his ability to add value, and we'll have to see if PDI holds up as well as PIMIX next downturn.
My most expensive funds are HUSIX, small value, 1.85%, and GPIOX, foreign small cap, 1.73%. I'm a little uneasy about both, especially HUSIX, since there are good and somewhat cheaper SV funds out there. HUSIX and GPIOX have both earned their money so far, but wow, what a high hurdle they have to overcome.
My thoughts are that with high ERs, you're betting you've got a genius on your hands (and not someone who just got lucky for a few years), while with cheap ERs, a team that's merely very good can earn their fees. Since genius is tough to spot, logicially I should have all my money with D&C and Primecap, but I don't. (Though a Primecap fund is my single largest holding.)
Yet Ed's commentary this month made me think about the other side of the coin: if the fees are too low, talent will flee, and a mediocre fund won't even earn back its modest ER.
What are your thoughts? How much are you willing to pay? What are your highest conviction high cost funds?
Bumper Crops Weigh On Ag ETFs FYI: I own a 1,200 acre farm west of Dubuque, Ia. It has been in my family for close to a hundreds
years on my father's side. The report I'm getting from the tenant who farm it for me is about 188 bushels of corn per acre.
Years ago, in a good year, I'd yield roughly 80-100 bushels of corn per acre. Better seed chemicals, and machinery have made the difference.
It’s the start of September and harvest season is upon the U.S., but agriculture-backed exchange-traded products aren’t reaping much new money.
Ag-related products are now in the red for the year as investors grow wary about record high crop levels and easing meat supplies
http://blogs.barrons.com/focusonfunds/2014/09/02/bumper-crops-weigh-on-ag-etfs/tab/print/
Qn re: Reorg of Causeway International Opportunities Fund (CIOVX) David wrote in Sep 1 2014 Commentary:
The underlying funds [owned by CIOVX] ... are institutional shares of Causeway’s two other international funds – Emerging Markets (CEMIX) and International Opportunities Value(CIVIX) – so it’s hard to see how much gain investors might expect. The downside: the fund needs to entirely liquidate its portfolio which will trigger “a significantly higher taxable distribution” than investors are used to.
Years ago, the Vanguard International Index Fund started out as a fund-of-funds, holding shares of the European Index and Pacific Index Funds.
At some point, it, too, converted to a structure in which the fund held foreign shares directly.
Does anyone recall whether or not investors in Vanguard's International Index fund incurred capital gains distributions? If not, how did Vanguard do it? Clever timing (i.e., conversions incurred at a time when there was a loss), or something else? Thanks.
Q&A With Larry Puglia, Manager, T. Rowe Price Blue Chip Growth Fund
S&P 500 Might Go To 3,000 ? FYI: The S&P 500 is up a whopping 200% from its March 2009 low. At 2,003, the S&P has already exceeded many analysts' forecasts.
Morgan Stanley strategist Adam Parker and economist Ellen Zentner believe that the conditions are just right for the bull market to keep going for
years.
"Our best guess is that an S&P 500 peak of near 3000 is possible should the U.S. expansion prove to have five or more
years left to it, based on 6% per annum EPS growth through that time frame and a 17x price-to-earnings ratio," Parker writes.
Regards,
Ted
http://www.businessinsider.com/morgan-stanley-sp-500-3000-2014-9
RE-DO, total return numbers, the quick method Howdy
@rjb112 You noted: "in that stockcharts.com, as you mentioned, cannot often easily accept any start and end date you wish......although apparently it is easy to get within 1, 2 or 3 days of your desired time frame."
>>>At the 200day slider below the graph area, yes; one may "left click" and hold to move the entire 200 day time from to the left and move backwards in time, or; "left click" and hold only the left end of the slider and move left to travel backwards as far as a fund inception date may allow. NOTE: I have not checked to find whether there is a limit as to how far backwards in time that stockcharts allows.
Also, as two examples: one may drag the left side of the 200 day slider to the left to 1256 days, which is about 5
years time.....or 2518 days which is about 10
years of a backward look. Another: is to leave the slider at the 1256 (5 year period) just mentioned and then left click onto the slider and hold, then drag the slider around to different time frames of a 5 year period.
At the bottom right corner of the graph, one will find the corner filled with several small diagonal lines. Holding the mouse here will allow you to shrink the size of the graph as you move towards the upper, left corner. I have to do this; as I can't fit the entire image with dates at the top and still see all of the other info a the bottom of the area where the slider and tickers symbols are placed.
Lastly, I find that getting close (within a few days of data) is more than accurate for my needs. I also like to use the "red and green" graphing icon at the far left edge, after having viewed the line chart. Especially when viewing up to ten symbols. Additionally, when a line chart is displayed, the mouse pointer may be placed upon the line to find a date and dollar value represented by the graph.
Ok, my eyes sting from painting all day long and so pillow time for me soon.
Catch
RE-DO, total return numbers, the quick method @VintageFreak.
...rolling returns over X
years...
What is highest X you think is of interest?
10, 15...20?
Let me know.
Thanks, c
How ETFs Define 'Quality" Hi ibartman,
I think the Morningstar article on hidden quality in dividend ETFs makes a lot of sense with some caveats. The author rightly points readers not just to dividend paying ETFs but ones that emphasize sustainable dividends as high dividends by themselves can be from junky low-quality companies. When I interviewed the folks at State Street about their quality mix ETFs they said that dividends were a hybrid factor of both quality and value. A high dividend yield indicates value as the lower the price goes on a stock the higher the yield on its existing dividend will be. Meanwhile a company that has the wherewithal to pay a consistent dividend can indicate quality.
That said, not all quality companies are dividend payers and not all dividend payers are quality companies. So if you buy a dividend oriented quality ETF like QDF you will be leaving out those growth-oriented quality companies that choose to invest in R&D, debt reduction or share buybacks instead of paying dividends. Think of how many
years Apple and Microsoft went without paying dividends yet had rock solid balance sheets and were high quality companies.
As for finding an ETF that combines all of the FF factors, quality and dividends, I'm not sure on that. There is a way certainly to do it with two ETFs, but maybe not one. The new State Street quality mix ETFs combine value, low vol and quality but without dividends and without small caps, another FF factor. Perhaps more intriguing for you though might be the new "actively managed" or "enhanced" ETFs from iShares. The iShares Enhanced U.S. Large-Cap ETF (IELG) says it is managed with a focus on " quality,
value and size factors." And its expense ratio is just 0.18%. Since it is actively managed, it wouldn't surprise me if its managers are looking at dividends. But combining it with a dividend ETF or the excellent VDIGX which you already own might work well.
ishares.com/us/products/239529/ishares-enhanced-us-largecap-etfCheck out State Streets SPDRS as well:
https://spdrs.com/product/fund.seam?ticker=QWLD
RE-DO, total return numbers, the quick method What I really need is a website that calculates rolling returns over X years. How many times have we "waited" long enough for a fund to get a good 5 year record because we do not want to simply buy on 1 year numbers? Only to find 2 years later the 5 year number stinks, but then again becomes respectable 3 years later. It would be so nice to see rolling returns over X years for ever fund out there, for every month of existence taken 5 years out.
And Catch. If you have "how to fix 1 ft x 1 ft hole in ceiling drywall by yourself" tips for me I would appreciate it. I can fix any electronics but water, dust, paint gives me the heebeejeebees.
TIPS Back In Vogue
Chuck Jaffe: Is Your 'Alternative' Fund A Ticking Time Bomb ? My "alternative" (sic) fund owns: Stocks, Bonds, Options, Derivatives (in various forms), Preferred Stocks, Debentures, Swaps....and that is quite enough because if I knew more I would be managing my own money.
During the dot com boom did most people knew WTF their mutual funds were investing in? How about during the financial crisis? How about EVER? When it comes to most people they don't know what they are doing OR their day job is not managing money. Where were you Jaffe on 2000 or in 2007? Did you warn people about Tech stocks / Financial stocks? Now after a few people have come and written articles about how "alternative investments" are not what they are cracked up to me, you come and write a "me too" article? What a job. What a F****** job!
Over the years I have learnt enough to know a certain word in the fund name means nothing. M* categorization sucks to boot regardless of whether the word "alternative" is in the name of the fund. I give you Legg Mason VALUE trust. VALUE? Purified Bovine Waste.
To me, someone like Steve Romick is an "Alternative Fund Manager". Someone who invests with lower co-relation to S&P 500 just like "bonds" are supposed to do. Since I'm no 007 I go with Romick. I can say the same about John Deysher who ids 50% in cash. Or even Hussman, who I admit needs to look at "alternative" (pun intended) ways to hedge.
Finally, he is taking a page out of MY book. Diversify manager risk away by owning multiple alternative funds? That's all you got Chuck? Remember, how investors should not own too many funds?
