Time for Name the Fund

VintageFreak

This is easy. M* don't like. It will never admit it, while it keeps currying favor with other managers whose funds never "recovered" (sic). Investors who listened to M* would have generally fared badly. The performance numbers are from M* as of right now.

10K at inception, VFINX : 41K, FUND : 137 K
M* would start dissing the fund at end of 2000
10K on 12/31/2000, VFINX : 20.8K, FUND : 28.4K
10K on 12/31/2001, VFINX : 23,4K, FUND : 31K
At this time M* is all over this fund.
10K on 12/31/2002, VFINX : 30.4K, FUND : 41K

Need I go on?

Last 10 years, VFINX : 20K, FUND : 28 K
Last 5 Years, VFINX marginally higher than fund
Last 3 Years, VFINX marginally lower than fund

little5bee

Great post @VintageFreak! I have no freakin' idea!

msf

Well that's a blast from the past.

The best known of the early managers went off to form his own competing fund that cratered even worse. Like the fund he left, this "spinoff" did marginally worse than VFINX over the past five years, but a smidgeon better over the past three. This original manager was a media darling at the time he left.

Ted

@MFO Members: Help! Would someone please translate VF post into English !
Regards,
Ted

msf

"M* don't like. It will never admit it, while it keeps currying favor with other managers whose funds never "recovered" (sic)."

M* didn't like this fund when it covered it (aside from one later report, it stopped covering the fund in the mid 2000s, just like its "spinoff" and probably its other peers).

This fund has recovered its losses from its 2000 peak, but M* never praised this fund. Rather, M* continues to praise other funds (not necessarily its peers) that didn't recover from the bust at the turn of the millennium.

"Investors who listened to M* would have generally fared badly."

The vast majority of this fund's peers have vanished. M* continually panned the group of funds as a whole, so generally one would have done well by heeding M*'s advice.

But this fund fared moderately well, so one would have done better holding on and ignoring M* for this specific fund.

"10K at inception, VFINX : 41K, FUND : 137 K"

See graph for growth of $10K. VF set chart at "maximum", and moused over to get the final (current) values of VFINX and this fund as of the posting date.

"M* would start dissing the fund at end of 2000"
M* started coverage in 1999, and never wrote a positive report (though some were nuanced). The mid 2000 report said that one could do better by purchasing a peer fund.

The late 2000 report (apparently the one VF is using as the first "dissing") said that the fund was positioning itself somewhat defensively (not a bad idea for late 2000), while acknowledging that the fund still lost as much as its average peer. Being defensively positioned, it should have fared better.

"At this time [late 2001] M* is all over this fund."

The late 2001 report said that the fund had blown away its peers by virtue of its defensive positioning (losing a lot less), but if the market turned up, that could reverse. M* advised avoiding the fund - it was no longer focused on its objective (hard to fit into a portfolio), heavily concentrated (high risk), and had recently changed management (favorable short term performance may not be meaningful).

"Last 5 Years, VFINX marginally higher than fund
Last 3 Years, VFINX marginally lower than fund"

Over the past five years, this unnamed fund has slightly underperformed the S&P 500; over the last three, it has done a smidge better than the S&P 500. (Didn't I just write this before?)

VintageFreak

@msf - I am speechless ! Except M* had already started saying bad things about this fund in 2001. It was not doing well you see, like many other funds. Janus and Legg Mason were still still M* darlings but not this fund or this company.

However, I believe you have guessed the fund and are keeping the conversation going. Respect.

Now admittedly I don't know if M* had a report out on the fund, but they sure talked about it a lot, because it was THE thing at the turn of the millennium. That is a big fat clue right there. No way anyone was around that time and has not heard about this fund.

Come on guys! Don't give up so fast

VintageFreak

You guys are no fun. Harrrummppphhhhh!

WWWFX

BobC

VF you are so right on this. M* has a bad habit of either dissing some very good funds or simply ignoring them. The latter is just fine by me, since it means those funds fly under the radar and do not amass large asset bases. They also will diss all funds of a fund company they don't like. For instance, they currently hate a large, midwest-based company, and rarely have anything good to say about any of that company's funds, despite the fact that several are quite good. For years they billed and cooed with PIMCO and had Mr. Gross at virtually every M* conference (along with the other same managers every year). Unfortunately, M* is the only game in town for detailed research.

willmatt72

BobC said:

VF you are so right on this. M* has a bad habit of either dissing some very good funds or simply ignoring them. The latter is just fine by me, since it means those funds fly under the radar and do not amass large asset bases. They also will diss all funds of a fund company they don't like. For instance, they currently hate a large, midwest-based company, and rarely have anything good to say about any of that company's funds, despite the fact that several are quite good. For years they billed and cooed with PIMCO and had Mr. Gross at virtually every M* conference (along with the other same managers every year). Unfortunately, M* is the only game in town for detailed research.

Just curious if you are referring to American Century funds, Bob.

msf

Here's a list of internet funds from 2001. Very familiar names from the dot com era. Was M* wrong to pan this subcategory en masse, given that the vast majority of these funds are no longer with us?

If M* was going to pick one, should they have picked a fund with unproven management (all newbies), or followed the manager (Ryan Jacobs) who built that fund's record (a la Gundlach, but also Winters)?

Hindsight is wonderful. Since the M* "dissing" was in the 1999-2005 era, wouldn't it be more relevant to look at the fund's performance in, say, the decade of the 2000s? (So that we can see whether it would have been worthwhile avoiding the fund prospectively.)

VF suggested using VFINX for comparison. I'm okay with that (of course, since that stacks the deck ) Using the same M* charts, we can get what $10K would be worth at the end of that decade. For WWWFX, it was $6527. VFINX lost only 1/3 as much, winding up with $9,045.

I'm in complete agreement that M* tends to fawn over some funds and managers; PIMCO/Gross is indeed a fine example of that. There, you can look at M*'s comments vs. performance over the next 1-3 years and see the disconnect.

VintageFreak

@msf. We can't have it both ways. We want to compare funds to their "category" but fact of the matter is any fund's mettle is tested against the S&P500. Besides if we want to be an active fund manager then we should expect his M* category to change. M* categorization is not unimpeachable and M* panned WWWFX on an absolute basis and not against Internet or Tech funds. M* basically called WWWFX the Charlie Manson of mutual funds.

I give you Legg Mason Value Trust. No Value. No Trust but it was forever a "Value" fund for M* with sycophantic appreciation of "Miller's version of Value is this/that/eclectic/barf/crap/blech".

M* f'ed up, and when it does it NEVER fesses up. They allegedly never make a mistake, but keep pointing year after year as to how investors mess up since "investor returns" never match "fund returns" because it is investors who keep buying and selling at the wrong time. The problem is it is M* who prompts investors to do that. This is just like capitalizing profits and socializing losses. If things work out, it was M* who helped, but when they don't it is investor's fault. M* kept people in so many other funds it shouldn't have and took them out of WWWFX based on their ANALysis.

Fin.