So now that American funds are available NTF, I've been toying with DCAing a small amount every month in them. Needless to say I will do so opportunistically, not regularly. Low minimum is attractive. However, I'm still distressed from the fact they used to be a load shop and from M* over the top praise for this fund family.
Given my age, I was thinking about the following funds instead of all equity funds. Thinking these are a little less aggressive and since I still have some hair left, reasonably steady.
BALFX, IFAFX, CIBFX, GBLEX.
The idea is to start with $250 in each = $1000, and then repeat $1000 multiple times. Eventually I would stop at $10K in each fund invested over time. This was money I was keeping aside for my daughter's college, and I'm happy to say it does not look like we will need as much as I thought we would (good I married smart and there was appropriate gene transfer). Now I don't want to buy more funds than I need so if only one or two would likely achieve the same outcome, I would rather do that. Starting this post with the hope those who have invested in American funds can offer some insight/opinion.
Comments
I don't own any of their balanced funds, so can't comment there, sorry.
While you may not appreciate M*'s opinions, its star ratings (backward looking) are more objective. M* shows American Funds' asset-weighted (I think) fund ratings to be: 4.0 (domestic), 4.3 (international), 4.2 (muni), 2.4 (taxable bond). That compares favorably with Vanguard at 4.0, 3.1, 4.0, and 3.3. It probably looks good compared with any large fund house.
With respect to load families, keep in mind that PIMCO, Loomis Sayles, American Century, etc. are load families. According to M*'s data, even T. Rowe Price sells some load shares (1.9% of its AUM) as does Doubleline (0.2% AUM).
IMHO what matters is how much you pay for access, not how much others pay.
I did see the SAIs, and saw $1MM investements of its lead manager in all funds. Other managers however own around $100K. Given the asset size of these funds, I want to do a little more research.
Comparing with Vanguard - if they are anything like Vanguard, I would be silly to worry. I'm also looking at Franklin Mutual funds that may be available without load to me. Thanks for the endorsement on American funds.
I feel, you are a pretty skilled investor to present such a question to the board. My comments are not ment to be investment advice ... etc.
I have owned American Funds for many years, since the late 50's early 60's; and, I currently own three of the funds you have listed (but A share class). I feel they are a fine large cap fund shop. In doing an Instant Xray on your subject hypothetical portfolio consisting of each fund you list in the amount $250.00 each I am seeing a good bit of duplication. With this, and if it were for my own portfolio, I'd add the Small Cap World Fund and drop the Global Balanced Fund to gain some exposure in the small/mid cap space.
I have linked the data entry page for Morning's Stars Instant Xray analysis. This might be something you'd benefit by spending a little time with. In addition, I'd do a risk tolerance and need analysis on yourself to see if what you have assembled fits with your investor profile determined by the analysis.
Old_Skeet
It is hard to imagine how any fund manger running Billions can do any better than an index. If you want big funds like that I would stick with Vanguard
@sma3 Exactly! In and out of American Funds. I am certainly worried if they have to be bought at the bottom of the market and whether they are better than others with similar funds. Their lower expense ratios might be an edge, but there is always Vanguard Balanced Index to consider. There are not many NTF options at TIAA that I don't already own that are acceptable. I might dip my toe in AF soon, but will be very careful. When you buy vs What you buy always triumphs.
Better take a closer look at those F shares ... I'm thinking most F shares are C share converts and the only way to come by them is to first buy C shares and over time (10 years) let them convert to F shares. Not sure if this is so; but, if you are sincerely interested you might pick up the phone and call American Funds to comfirm or dispel. Their listed phone number is 1-800-421-4225.
In addition, I believe, some F shares can be bought out right and are for advisor wrap account purchase programs. So, I'm thinking, although the F shares expense ratios might be low compared to A shares with sales loads some F shares will be subject to on-going advisor/broker wrap account fees and charges. Invest a million with them and I believe they will wave sales charges on their A share funds.
With this, I'm thinking there is just no "free lunch" for the American Funds small retail investor. However, I do admire you for trying to find one.
Skeet
Well, you are paying a 12b-1 fee (F-1 shares) that goes to brokers for NTF shelf space, so it's not exactly a free lunch. But that lunch doesn't cost more than dining on, say, DLTNX or any other NTF fund that's paying for shelf space.
Schwab and Fidelity offer 57 American Funds NTF (e.g. CIBFX at Schwab and at Fidelity). This is a new arrangement that was set up a couple of months ago.
Note that this is not the first time that American Funds has made class F shares available NTF. Around 2004, American Funds sold the shares NTF through some lesser known brokerages. It took me a fair amount of digging to find any info, but apparently this fact had been posted to misc.invest.mutual-funds in mid-2004 with a link to Firstrade's American Fund page.
That link no longer works, of course, and Firstrade is not one of the brokers American Funds is working with this time around. Also back then, the shares were called class F. It wasn't until a few years later, when American Funds added class F-2 (F shares without the 12b-1 fee) that the name was changed to F-1.
I know you can't believe everything you read on the internet, but if I see something that I had posted myself, well that's good enough for me.
This is a job to tide me over until actual retirement in five years or so and I'm just putting in the 6% to get the match. It is all going into this fund and I've been happy with it so far.
For those interested, linked below is information on American Funds different share classes.
https://www.americanfunds.com/individual/investments/share-class-information/share-class-pricing.html
Click on the F shares to view the different type of F shares available and details about these shares.
And, below is another link that covers frequently asked questions about fund shares.
https://www.americanfunds.com/individual/service-and-support/other-resources/share-classes-pricing-options.html
Click on the C share conversion tab for more information about C shares converting to F-1 shares.
I think this should posture my comments made in this thread earlier and clear the confusion that some might have.
Best regards,
Old_Skeet
I have got to agree with you on Class-C shares. While some buy these (or are sold Class C shares) they are indeed not for me! At one time, a broker that was after my business pitching Class-C shares ... and, I never (ever) went back there or returned his calls.
In addition, I have a concern with Class B shares as well.
For me, it is Class A shares. Although, I am subject to upfront sales loads, on some new purchases, I have found the on-going expenses to be lower. With this, from my perspective, they are the best deal for the long term investor. Once invested in A shares an ivestor can move around through nav exchanges within the same family of funds without having to pay another sales commission. In fact, I have been able to move from one fund to another throuh nav exchanges within the same family of funds with no direct expense to me whatsoever.
Now, I know A Shares are not for everyone; but, it is what I started with. And, for me, they are indeed keepers.
I wish ... all ... "Good Investing."
Skeet
http://www.kiplinger.com/article/investing/T041-C007-S001-how-to-buy-american-funds-without-a-sales-charge.html
Repeating myself: Schwab and Fidelity offer 57 American Funds NTF (e.g. CIBFX at Schwab and at Fidelity). This is a new arrangement that was set up a couple of months ago.
Check out the links I provided. If Schwab were to add fees on its AF NTF funds, it would be cheapening its OneSource™ brand and SelectList® service. I realize that one should be suspicious of things that seem too good to be true, but given that lots of other load families are making their funds available load-waved, NTF, but carrying 0.25% 12b-1 fees, does this move by AF really seem too good to be true, or just good?
BobC: "C-class shares should be outlawed. "
While I concur with the sentiment, I fail to see the difference between class C and wrap accounts. I'll use the same fund as above: Capital Income Builder, to compare.
Class C (CIBCX): 1.40% ER + 0% advisor costs = 1.40% total cost of ownership
Wrap/Class F-2 (CAIFX): 0.40% ER + 1% wrap fee = 1.40% total cost of ownership
Wrap/Class F-1 (CIBFX): 0.67% ER + 1% wrap fee = 1.67% total cost of ownership
Reverse churning appears to be a similar risk either way.
Then they reject my order. Jokers! I'm already regretting opening account with them.
Just food for thought.
I'm just ticked off they rejected my order, but more importantly at least say why. There are other funds that have $0 minimum listed. My orders for various amounts got rejected. I can't keep rolling the dice increasing the size of my order.
I'm almost contemplating closing the account. The problem is I don't want to open account at E*Trade. That would carry the same amount of aggravation I have for doing business with Wells Fargo.
I own FEBAX @Schwab.
This is not a new share class, it is by definition NL, and has generally been available since shortly after inception (2001) at many brokerages. But sale of this class is usually restricted to advisors (what M* denotes as 'A' on its fund purchase pages).
This is a very normal situation. How many times have we seen posts here asking: Does anyone know where I can get fund X? Or, why is my brokerage forcing me to use an advisor to get fund Y? Or, I can't get fund Z NTF at my brokerage any more, where could I still buy it?
For example, Scottrade says that it sells CIBFX NTF. Yet read Scottrade's page for these F-1 shares: https://research.scottrade.com/qnr/Public/MutualFunds/Summary?symbol=CIBFX
I'm going to wait till minimum period of waiting for my MF holdings is over, sell and then bail. My money is sorta blocked until then, but luckily I didn't invest a whole lot.
Several years ago, I had an equally silly experience with them and vowed never to return. Age cooled me, and they were now competing with my attention against the likes of E*Trade. I'm thinking I'll just open another second account with Schwab and run a parallel portfolio. Not sure if that's possible.
I would be fine if TIAA did what they said. They are saying something, doing something else, and then not saying anything about what they are not doing.