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According to M*, RNCOX does not exceed the S&P by it's ER over the last 1 and 3 years. Is it time to abandon this previously recommended "Core Fund?" I've sold off 2/3 over the past 2 years. Is it time to abandon the remaining third?
According to M*, RNCOX does not exceed the S&P by it's ER over the last 1 and 3 years. Is it time to abandon this previously recommended "Core Fund?" I've sold off 2/3 over the past 2 years. Is it time to abandon the remaining third?
Is the S & P the fund's benchmark? I'm guessing no.
Don't know the fund, so no specific opinion, but I'd suggest looking around for possible replacements in the moderate allocation category (since that's what RNCOX is, not a stock fund comparable to the S&P 500) and comparing return:risk data. That E.R. is awful high for a standard MA fund, if that's what it is ... more like what you'd expect from an alt fund (long-short etc.).
It's not the usual 60/40 fund though. It's expenses are in line with the strategy it employs which involves a lot of vehicle switching. It has bested FPACX since inception in returns to shareholders and that fund seems to have a rabid following around here. You can check it out with M* if you wish. I like the fund.
Part of the reason that the expenses are high is that it is a fund of funds or, more specifically, a fund of closed-end funds. On the plus side, when markets move up, the fund has an additional kicker in the form of a narrowing of closed-end fund discounts/increases in premium -- note the underlying assumption that CEF fund discounts tend to be much higher when the market is near lows and much smaller when the market is near highs.
I'm thinking of starting a tally on the MFO board of excess return per expense ratio. May be interesting to see which funds deliver highest value for investor expense.
Howdy, You noted: "I'm thinking of starting a tally on the MFO board of excess return per expense ratio. May be interesting to see which funds deliver highest value for investor expense." >>>The total return of any fund obviously varies over a time period; being the luck of where an index fund or active managed has its holdings during "a time period". Our easy tools for viewing are the traditional time periods used at M*. One can view the returns of a fund such as VILLX; which has a very nice return pattern for several years; but happens to be having its ass kicked YTD. So, it is named a balanced fund; but the current balance does not favor the current equity markets. Don't know where their other balance arrives.
Is there any method to really value an expense ratio and any contribution to a return???
@catch. I don't know, just been thinking about it lately. Actually, Mebane Faber's book "The Ivy Portfolio" got me thinking about it. So, something I want to explore. Maybe nothing will pop out. But, maybe something will.
FWIW, M* ranks RNCOX at 45%tile for 1 yr and 50%tile for 3 yr against moderate allocation funds and 7.9% annual return for 3 yr, so I'm paying over 20% of the fund's return in expenses lately, if M* has the costs correct. It does rank MUCH better at the 5 year comparison and has a good rank this year.
Since I'm not sure what return and downside protection are worth, I do hope Charles can produce an excess return per expense ratio. It almost certainly will prove enlightening and provide some rational guidance in fund (or ETF or index) selection.
Re Bitzer's last note, the discrepancy in published fees might relate to its fund-of-fund nature. Lobbing-off the fees imposed by the underlying funds might result in a lower apparent fee. Just a guess, but have seen this with some more traditional fund-of-funds. USA-Today looks correct at 2.22%.
Break-down of investments has me wondering what the 45% "other" represents. Any chance they're shorting stocks? Suppose that might be metals, real estate, commodities or derivatives. My snap answer here is that no fund is worth that high a fee. No doubt I'm missing something others are seeing in this fund. My highest fee fund by far is a commodities fund that charges 1.44%. The more I follow similar plain-vanilla funds I've held a decade or more, the more I can see the effects slight differences in ERs have on returns over longer periods. Wouldn't have believed that a decade ago. But, now I do.
Comments
Regards,
Ted
Howdy,
You noted: "I'm thinking of starting a tally on the MFO board of excess return per expense ratio. May be interesting to see which funds deliver highest value for investor expense."
>>>The total return of any fund obviously varies over a time period; being the luck of where an index fund or active managed has its holdings during "a time period". Our easy tools for viewing are the traditional time periods used at M*.
One can view the returns of a fund such as VILLX; which has a very nice return pattern for several years; but happens to be having its ass kicked YTD. So, it is named a balanced fund; but the current balance does not favor the current equity markets. Don't know where their other balance arrives.
Is there any method to really value an expense ratio and any contribution to a return???
Regards,
Catch
Hey, hope all is well.
Since I'm not sure what return and downside protection are worth, I do hope Charles can produce an excess return per expense ratio. It almost certainly will prove enlightening and provide some rational guidance in fund (or ETF or index) selection.
Break-down of investments has me wondering what the 45% "other" represents. Any chance they're shorting stocks? Suppose that might be metals, real estate, commodities or derivatives. My snap answer here is that no fund is worth that high a fee. No doubt I'm missing something others are seeing in this fund. My highest fee fund by far is a commodities fund that charges 1.44%. The more I follow similar plain-vanilla funds I've held a decade or more, the more I can see the effects slight differences in ERs have on returns over longer periods. Wouldn't have believed that a decade ago. But, now I do.