Your Mutual Fund Manager Just Doesn’t Matter Much Anymore Hi Guys,
There is no universal correct answer to the fund management question. It depends on the specifics. Most funds these days are team managed, like 75% of them. For this majority, the answer is in the No bracket. But a respectable number of funds are managed by a mostly single or small group cohort that has a decisive influence on market decisions. It matters in this active group of fund managers.
The primary example here is the Warren Buffett/Charley Munger team. Any change here will likely have a major impact on how their firm will survive amd function. Even with this illustrious team, yearly performance varies over a wide range. Skill matters when investing, but luck and opportunities are unpredictable and also enter the performance equation. In the marketplace, the only certainty is outcome uncertainty.
Certainly not all fund managers are equal. Do you remember the Steadman fund family? I do. Those funds had dismal performance records for many years. Just like there are some long term losers, there are some long term winners. The trick is to identify them early. That's not an easy job.
Good luck for a successful search. A significant number of exceptions always exist.
Best Wishes
ADDED THOUGHT: Statistics are helpful, but can be misleading when incompletely reported. It is not enough to simply report the average of a Normal distribution. That's nice, but not enough. The standard deviation, the maximum and minimum values, and the sample size are needed to permit a meaningful interpretation of that statistic. Buyer beware!
Your Mutual Fund Manager Just Doesn’t Matter Much Anymore "Management change in a fund has no bearing on future returns."
Nonsense, and the M* report said no such thing. While funds, on average, may perform the same after changes as before, that says nothing about individual funds. If half the replacements were by managers who improved their fund's performance, and half the replacements were by managers who degraded their funds, the average would be a wash.
What the M* study said was that they couldn't figure out a priori which changes were the better ones, not that the a change in an individual fund had no bearing on the fund's future returns.
I'll take Rekenthaler's summary of the report over WaPo's. If you want to skip the anecdote and get to his analysis, skip down to the
Mixed Signals section.
Rekenthaler Report,
What to Do If Your Fund Changes Portfolio ManagersM* report,
The Aftermath of Fund Management Change
Better Than Expected, Barely Good Enough: Profits And Stocks The seasonal trend is for stocks to go soft during the summer ... especially, August. From what I have read, this seems to be so more times than not. I'm not surprised that earnings need to catch up with valuation. Stocks are not cheap as the article points out. I'm looking for a fall stock market rally and I'm thinking there needs to be a pullback (of sorts) for stocks to rally off of.
At the first of the year my thinking (and call) was that sometime during 2017 the S&P 500 Index would reach 2475 (or thereabouts). It's done that. Now, I'm thinking that the Index might do 2550 before year end (or thereabouts) if Congress can get it's act together in the near term and earnings continue to meet (or exceed) expectations. Will the Federal Government have to shut down due to the debt ceiling and/or lack of budget approval? What a way to run things. I'm thinking this is something that needs a fix along with healthcare and tax reform.
Isn't investing interesting?
Skeet
Will Jeffrey Gundlach's Trump-Like Approach On Twitter Work In Financial Services?
Your Mutual Fund Manager Just Doesn’t Matter Much Anymore
Any reason to pick up Vanguard PrimeCap funds? I believe that even with Flagship status, Vanguard limits you to $25K per fund per account per year.
It really depends on what you want to accomplish. The Odyssey funds are smaller cap (though still not small) and somewhat more expensive than the Vanguard funds. If you're considering POAGX, you're looking for something that's not so large cap and is more aggressive. The Vanguard funds (all of them) would be moving in the opposite direction. That said, these are small shadings of differences.
A plus of investing in a Vanguard fund is that if you're just at the Flagship boundary, that will help you keep your Flagship status when the market dips.
Morningstar screwed up again. I cancelled my M* Premium membership in 2005 --12 years ago !! because of all the M* website problems .---- 12 years later and it has only gotten worse !!!! UNBELIEVABLE
T. Rowe Price Capital Appreciation & Income Fund It's not the same Price I first invested with sometime between 1990 and 1995. Too d** many funds now days if you ask me. Not sure what they offered back than. I'll make a (probably incorrect) guess that it was around 30-40 funds in the '90-'95 period (not counting different share classes). Back than PRFDX was in large part their claim to fame. Around that period PRWCX was hatched. And it played second fiddle to the much larger PRFDX for a decade or longer.
Not too far off. M* shows
53 distinct funds that began no later than 12/31/9
5. About 1/3 of the number of funds they have now (1
55, again from M*).
Though PRWCX was "hatched" a mere 8 months after PRFDX (6/30/86 vs. 10/31/8
5). At the end of 1994 PRFDX had $3.2B AUM, while PRWCX had "merely" $6
55M. (Data from 199
5 prospectuses.)
Price had other claims to fame as well at the time, including PRNHX, then (and for another 1
5 years) managed by Laporte. At the end of 1994, The (then) small cap fund had $1.6B AUM.
T. Rowe Price Capital Appreciation & Income Fund It's not the same Price I first invested with sometime between 1990 and 1995. Too d** many funds now days if you ask me. Not sure what they offered back than. I'll make a (probably incorrect) guess that it was around 30-40 funds in the '90-'95 period (not counting different share classes). Back than PRFDX was in large part their claim to fame. Around that period PRWCX was hatched. And it played second fiddle to the much larger PRFDX for a decade or longer.
I realize they need to stay competitive with their peers and so need to provide lots of choices and attract more and more assets. Also, that there's some practical limitation to how much $$ a manager wants to manage inside one fund. Haven't had a chance to delve into this latest offering. But all the comments here sound interesting and thought provoking. Doesn't sound like a fund I'd be interested in adding to my established mix.
Price is a class act in a lot of ways - customer service and integrity among them. The $20 fee used to pertain to accounts a lot smaller than it does now. Seems to me the magic number was once $5,000. In recent years that jumped to $10,000 or $20,000. Not a problem. If you keep a relatively modest $50,000 under their umbrella or go to paper statements only (as msf and others have noted) they waive the fees.
T. Rowe Price Capital Appreciation & Income Fund Only new investors. Existing investors were grandfathered - according to a grandfathered poster in a M* thread.
At one time you could buy lots of funds with $1K min. Very few around these days (though Schwab is trying to buck the trend). Now, $2.5K or so is typical (2.5x) Inflation hits everything.
