The financial services industry, financial advisors, financial press and magazines don’t reveal the true cost of actively managed funds. Thanks for your honest insightful video and the Bogle article. I am one of your international subscribers from the UK.
I never understood the purpose of putting cash "inside" a portfolio. Why wouldn't you just keep cash in your own savings account? Is there some tax benefit or something?
For the most part I wouldn't go above 20 basis points. Perhaps for a specialized fund, such as micro cap or some type of emerging market fund, but I don't feel the need for these types of investments.
@@rob_berger Most of my $$ is at T. Rowe Price and American Funds at approx. .60% ER. In trying to determine whether it makes sense to move those to Vanguard and .04 is it just a matter of comparing the LTCG hit I'd take to the savings realized over time by the move? I'm 56 yrs old so only a 9 yr horizon. I realized 1.0% ER is high but didn't think .60% was awful ... until I saw your comment. Thanks
I understand the business case for ETFs. However, all my analysis using select American Funds (including Portfolio Analyzer) shows these managed funds out performing Vanguard ETFs. Am I missing something? Use $1,000,000 and funds in IRA (no taxes). No fees above expense ratio (about 0.68%). No trade cost. No sales fee. Compare: American Fund Vanguard 50% AMCAP VTI 25% ANWPX VXUS 20% ABALX VWELX 5% SMCWX VTWG Secondly, I fully understand looking back index funds as a rule kill managed. However, looking forward I'm predicting a shift due to the ability to pick winners in this time of COVID, rapid technology growth and innovation. For example: Airline stocks, Entertainment stocks, REITS.
Past performance is not indicative of future results. In my comparison of VTI vs AMCAP, the difference was minuscule, and I'd bet that VTI will soon outpace AMCAP due to the high expense ratio of AMCAP. AMCAP has only been around since 2001; you can also make the argument that the Nasdaq 100 (QQQ) would be better, as this ETF was launched around the same time. Hindsight is always 20/20, but high cost mutual funds more likely than not will underperform in the long run. Edit: I'd also like to add that AMCAP is not at all a bad fund, and if it's the only thing your employer has available then I wouldn't be too disappointed.
@@nvass99 Thanks for comment. Do you have any thoughts on the next 10 years being the decade of managed funds? There are easy losers coming out of covid, the tech boom, and innovation. Half the S&P is losing money. Like you said, past performance…….
@@joekuhnlovesretirement One of the concerns with indexing is that if too many people do it, then active management will become more prevalent; although this is usually temporary. Fund managers that outperform are either lucky or do so temporarily. This can be seen with Cathie Wood’s ARKK; sure the fund has performed tremendously as of late, but in the long run it will likely underperform.
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Thank you so much for explaining the expense ratios
I had no idea that those tiny fees over 30 years could add up to 1/4 million dollars or more
The financial services industry, financial advisors, financial press and magazines don’t reveal the true cost of actively managed funds. Thanks for your honest insightful video and the Bogle article. I am one of your international subscribers from the UK.
Love your channel. I’m not sure how I found you, but I’m so glad I did!
Massive Fan. Great analysis. Simple.
Bogle heads would never fall for these mutual fund grifters.
Bob, you are deadly with your information. The next time I have someone advocating managed funds, I'm going to point them to your videos.
Looks like an Edward Jones portfolio.
I really like your channel. Great information and presentation. Like a good wine your content has balance.
Thank you for this video. It explains a lot to me that I didn’t know.
Can you do a review of a portfolio that consists of EU domiciled ETFs and mutual funds?
I never understood the purpose of putting cash "inside" a portfolio. Why wouldn't you just keep cash in your own savings account? Is there some tax benefit or something?
The only reason to do that is in anticipation of a market dip, so you can pounce faster.
Great video. Thanks for sharing
Great Video
What would you consider a low cost ETF index fund? How would you justify an expense ratio above let say 0.20%?
For the most part I wouldn't go above 20 basis points. Perhaps for a specialized fund, such as micro cap or some type of emerging market fund, but I don't feel the need for these types of investments.
@@rob_berger Most of my $$ is at T. Rowe Price and American Funds at approx. .60% ER. In trying to determine whether it makes sense to move those to Vanguard and .04 is it just a matter of comparing the LTCG hit I'd take to the savings realized over time by the move? I'm 56 yrs old so only a 9 yr horizon. I realized 1.0% ER is high but didn't think .60% was awful ... until I saw your comment. Thanks
Awesome video!!!
Rob, i don't see a 'Shared Fee Structure' in portfolio visualizer? Maybe only avail in the paid version? Thx
You might be right. I do have the paid version.
Can you do a video on Cathie Woods ARK ETFs?
th-cam.com/video/Y6hKgaZpA4U/w-d-xo.html
I understand the business case for ETFs. However, all my analysis using select American Funds (including Portfolio Analyzer) shows these managed funds out performing Vanguard ETFs. Am I missing something? Use $1,000,000 and funds in IRA (no taxes). No fees above expense ratio (about 0.68%). No trade cost. No sales fee. Compare:
American Fund Vanguard
50% AMCAP VTI
25% ANWPX VXUS
20% ABALX VWELX
5% SMCWX VTWG
Secondly, I fully understand looking back index funds as a rule kill managed. However, looking forward I'm predicting a shift due to the ability to pick winners in this time of COVID, rapid technology growth and innovation. For example: Airline stocks, Entertainment stocks, REITS.
Past performance is not indicative of future results. In my comparison of VTI vs AMCAP, the difference was minuscule, and I'd bet that VTI will soon outpace AMCAP due to the high expense ratio of AMCAP. AMCAP has only been around since 2001; you can also make the argument that the Nasdaq 100 (QQQ) would be better, as this ETF was launched around the same time. Hindsight is always 20/20, but high cost mutual funds more likely than not will underperform in the long run.
Edit: I'd also like to add that AMCAP is not at all a bad fund, and if it's the only thing your employer has available then I wouldn't be too disappointed.
@@nvass99 Thanks for comment. Do you have any thoughts on the next 10 years being the decade of managed funds? There are easy losers coming out of covid, the tech boom, and innovation. Half the S&P is losing money. Like you said, past performance…….
I am owing 5 AM Funds too and they are doing great comparing to the benchmarks.
@@baybay7898 agree. New Perspective is killing it.
@@joekuhnlovesretirement One of the concerns with indexing is that if too many people do it, then active management will become more prevalent; although this is usually temporary. Fund managers that outperform are either lucky or do so temporarily. This can be seen with Cathie Wood’s ARKK; sure the fund has performed tremendously as of late, but in the long run it will likely underperform.
👍👍👍