Jump to content

Do you have investments in Mutual Funds?


Kirk W

Recommended Posts

With just a quick eyeballing, I seriously question some of these data and find them a bit misleading. Maybe the "brokerage" arm of Fidelity offers others' mutual funds which have low fees, but the expense ratio for Fidelity's own mutual funds is over 1% I would thoroughly expect Merrill Lynch and Morgan Stanley to promote actively managed funds which have higher costs. Scottrade must recommend more passively managed funds (i.e., index funds) which have lower fees. So, comparing them is like comparing an apple and a banana. The only valid way is to look at the fees and performance of individual funds in the same categories of funds.

Link to comment
Share on other sites

You might need to have the author's definition of a mutual fund. How managed is the particular fund as I suspect that varies widely. But I did find it interesting reading but since our funds are now actively managed in a directly managed fund that isn't classed mutual, I don't have any current fees to compare this to.

Link to comment
Share on other sites

Averaging fund expenses is not informative. A company that specializes in actively managed funds will always have fees higher than a company that specializes in index funds. These high expenses are the primary reason index funds out perform most actively managed funds. However, approximately 20% of the active funds, with higher fees beat index funds.

Link to comment
Share on other sites

With just a quick eyeballing, I seriously question some of these data and find them a bit misleading. Maybe the "brokerage" arm of Fidelity offers others' mutual funds which have low fees, but the expense ratio for Fidelity's own mutual funds is over 1%

 

I don't know what the point of the OP is, but these fees are only part of the story. If you read the whole report and go to its link titled The Real Cost Of Fees which explains all fees or total fees you get a very different picture than the original graph which shows only one type of fee. As I talked about in another thread on this forum ("Hidden Fees") expense ratios are only one of many fees and the rest are often hidden in the fine print.

 

Quote from the link:

"Total Fees

For each financial institution, the average total fee, combining advisory fees and mutual fund /ETF fees, was calculated by adding the average advisory fee percentage to the average mutual fund/ETF expense ratio. Personal Capital found that average total fee percentages range from 1.06% (USAA) to 1.98% (Merrill Lynch)."

Link to comment
Share on other sites

It's interesting that "Personal Capital" does not include Vanguard in the analysis. Perhaps it is because Vanguard's fees are much lower than Personal Capital's and they would therefore have eliminated themselves at the top contender.

 

Vanguard charges an advisory fee of 0.3% of AUM vs. 0.89% for Personal Capital.

 

And, Vanguard generally has the lowest fund expense ratios in the industry.

 

----ron

Link to comment
Share on other sites

X6 for Vanguard.

 

The 0.3% AUM fee is only if you use their Personal Advisory Services, but is great if you prefer someone else do the managment. We don't use it.

 

I am absolutely appalled by the AUM fees and front-loads (and capital gains churn) a couple of the "big" brokerage houses cost my mother and what Merrill Lynch continues to cost my m-i-l (my mother moved to VG).

 

Michelle

Link to comment
Share on other sites

Up to 6X's on Vanguard, is probably the reason they were not included:)!

 

We have a mix of one Fidelity fund, some TD Ameritrade, and a mix of New York Life and their Eagle funds. I nudged my daughter and MIL into Vanguard.

 

In general, I belive Vanguard and Fidelity are the place to go when first establishing mutual/etf based investments. Even individual stocks can be purchased thru them too. For those with actively managed funds, I feel it is more important to build a relationship with a FA that you feel understands and follows your belief and desires while investing. For this, expect to pay a bit more then this active management. Only you can decide if these higher fees are warranted for the services the active managed funds are providing for you. 1, 2, 3%+ can be 'OK' - depending upon total return, and your desire for FA's active management.

 

Best to all,

Smitty

Link to comment
Share on other sites

??Do you mean your funds are actively managed for free? No fees?

I don't believe that I said that. What I did say is that I'm no longer invested in any mutual funds but am in a much more actively managed fund pool. which isn't classed a mutual fund.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

Guest
This topic is now closed to further replies.
×
×
  • Create New...