Originally Posted by foxfirev5
After watching these funds for several years I have come to the conclusion that they offer very little I can't get with my AA of index funds. This restructuring into a 4% payout fund confirms my thoughts. No need to pay an extra 20-30 bps to take a periodic withdrawal.
For me and for many people here, a DIY approach using index funds to achieve your desired AA and then taking your withdrawals every year makes more sense than investing in these funds. But for others who may draw some emotional comfort from active asset allocation management (and wil therefore stick with the plan rather than lose their nerve and sell when things get gloomy) and who just want a monthly check, these funds could be a good approach. At the very least, the "4% of annual account balance" approach eliminates the potential of entirely running out of money and allows a portfolio to recover from some down years.
For the right customer, these funds could be a pretty darn good answer, especially when we look at some of the other cr*p in which people are invested, and the fees they are paying to be invested in those ways.