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need help with mutual funds
Old 01-12-2014, 12:50 AM   #1
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need help with mutual funds

I am currently in my 3rd year of retirement and am looking at moving from my FA to Vanguard or some one else where I could take more control of managing my money myself. I currently have approx. 200M in the below funds which according to my calculations I am paying about $4000 in expenses.

Can someone tell me what would be similar funds with a lower expense ratio?

Thanks

blackrock global allocation inv c
invesco balanced-risk allc c
lord abbett floating rate c
lord abbett short duration income c
transamerica asset allc moderate c
transamerica multi-manager alt strat c
transamerica multi-manager intl c
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Old 01-12-2014, 06:44 AM   #2
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You should not care what are similar funds with lower expense ratios. You want PORTFOLIO with a lower expense ratio.

Except for some bond funds, those funds seem to be balanced funds or something with a mix of all kinds of various types of assets classes. They obsfuscate or hide what they are in or what they are trying to accomplished.

A global fund usually has US and foreign stocks in it.
A floating rate fund usually has risky bonds and fixed income things in it.
A short duration income fund probably is a short-term bond fund.
An asset allocation fund and a balanced fund have everything in them.
Alt strat is probably alternate strategies which may have commodities, gold, and other losers in it.
Intl is an international fund.
mulit-manager just means there are alot of cooks spoiling the recipe.
C class shares have the absolute highest expense ratios. It has been suggested that they be banned.


If you have the ticker symbols for your funds, you can put them into a Morningstart Instant X-ray to see what kind of portfolio they create, then you can create a similar portfolio.

Here's the Instant X-ray link: Instant X-Ray Stock Fund Investment Portfolio Holdings Free Analysis Research Tool - Morningstar
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Old 01-12-2014, 08:35 AM   #3
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Hi chas,
Good move to keep your money by lowering those annual fees! We probably need more info about your situation. To start with, is this 200M the fixed income portion of your portfolio, or the entire portfolio?
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Old 01-12-2014, 08:49 AM   #4
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Before even getting into all of that, what is your risk appetite and target asset allocation? What is your current asset allocation? You can evaluate your current asset allocation with the X-Ray tool that LOL! steered you to.

Once you decide what your target AA is, you should be able to pick a handful of Vanguard index funds that will make a sensible portfolio. Or you could pick a target date retirement fund that aligns with your desired AA and let it ride. For example the Vanguard Target Retirement Date 2020 fund has a 60/40 AA and its ER is 0.16%, whihc would reduce your annual costs from $4,000 to $320 and all else being equal, increase your return by over 1.8%.
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Old 01-12-2014, 08:53 AM   #5
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I think a fee of $4,000 is reasonable for $200M!

As others are pointing out, there is work to be done. The first thought I had was something like this. These funds may or may not be well-thought out. It is probably best to do a complete analysis, and find what income they need. Quantify the risk level they want/need, and then find an allocation.
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Old 01-12-2014, 01:46 PM   #6
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I assumed that $200M = $200,000 and not $200,000,000. And I think everyone else did as well.
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Old 01-12-2014, 02:19 PM   #7
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Quote:
Originally Posted by chas57006 View Post
I am currently in my 3rd year of retirement and am looking at moving from my FA to Vanguard or some one else where I could take more control of managing my money myself. I currently have approx. 200M in the below funds which according to my calculations I am paying about $4000 in expenses.

Can someone tell me what would be similar funds with a lower expense ratio?

Thanks

blackrock global allocation inv c
invesco balanced-risk allc c
lord abbett floating rate c
lord abbett short duration income c
transamerica asset allc moderate c
transamerica multi-manager alt strat c
transamerica multi-manager intl c
May I guess that your portfolio is $200k, not $200M? We don't get a shot at $200M very often...
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Old 01-12-2014, 02:22 PM   #8
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Quote:
Originally Posted by pb4uski View Post
Before even getting into all of that, what is your risk appetite and target asset allocation? What is your current asset allocation? You can evaluate your current asset allocation with the X-Ray tool that LOL! steered you to.

Once you decide what your target AA is, you should be able to pick a handful of Vanguard index funds that will make a sensible portfolio. Or you could pick a target date retirement fund that aligns with your desired AA and let it ride. For example the Vanguard Target Retirement Date 2020 fund has a 60/40 AA and its ER is 0.16%, whihc would reduce your annual costs from $4,000 to $320 and all else being equal, increase your return by over 1.8%.
I'd do something like this unless the money is split between taxable and tax-deferred accounts. They you might want to unbundle. But you should be able to keep the ER in the 20bp range.
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Old 01-12-2014, 04:43 PM   #9
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I got my K and my M mixed up, it is $200,000.

Review next week with Morgan Stanley FA. As stated previously thinking about doing something different.

Husband = 60
Wife = 59
Home is paid for. No other debt. Thinking about a second home in Az.
Emergency Fund = $20,000
3rd year of retirement, currently non cola pensions (2) are covering yearly expenses. Includes a $19,000 bridge per year until 62.
Approx expenses are $80,000 before taxes. Therefore will need to do something with one of us at 62 with SS to replace bridge.

Portfolio is:
65% stock / 27% bond / 8% cash

Total portfolio is $1,200,00. 21% return in 2013.
$380,000 in one stock, taxable, held outside our 401K, 43% return for 2013 (I know this much of one stock is dangerous!!!)

The following are in my 401K account.

$200,000 in mutual funds list previously. expense = $4000
$430,000 in a managed portfolio. cost for 2013 = $4933
$110,000 in autocallable's and structured notes (supposedly no cost to me)
$80,000 in cash - almost no return for 2013.

Thanks
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Old 01-12-2014, 04:46 PM   #10
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Go here: http://www.bogleheads.org/forum/view...php?f=1&t=6212
and follow the directions.
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Old 01-12-2014, 05:01 PM   #11
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You are spending 9 grand a year on portfolio management? Holy crap! Perhaps I really should get into this business.
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Old 01-12-2014, 05:38 PM   #12
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OP, I think of it this way. You're currently spending $8,933 for management of $630k. If you were in low ER funds that would be ~$1,000 so the savings of $7,933 a year are almost 10% of your $80k/year of expenses. After the initial effort of moving the funds it may take you a few hours a year to monitor and rebalance. Low hanging fruit.

Also, with the amount of assets you have I suspect that Vanguard would do a free financial plan for you and make recommendations of good no-load, low-cost funds appropriate to your situation.
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Old 01-12-2014, 06:56 PM   #13
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Here's a simple way to start. Pick the level of complexity you like:

Single fund: balanced funds (stocks and bonds) Vanguard Target Retirement 20XX (2040 is VFIFX), Wellesley (VWINX), Wellington (VWELX), STAR (VGSTX)
(note: some of those may be less diversified than others)


Single Bonds fund: Vanguard Total Bond Market VBMFX,BND)
Single stocks fund: Vanguard Total World (VTWSX, VT)

Two stock funds: Vanguard total Stock Market (VTSMX, VTI), Vanguard FTSE All-World ex-US (VFWIX, VEU)

More: divide foreign into developed and emerging markets, divide any or all into growth and value funds, divide any or all into small and large cap, add real estate or precious metals or natural resources or whatever strikes your fancy.

I'll let others work on more bond recommendations, I don't do much with them.

I go the full-blown slice-and-dice "More" option. It gives me a chance to overweight some allocations and rebalance between all of them. Hopefully that nets me an extra 1% or so a year. And I use some active funds in the optimistic belief that they might beat the indexes. I have spent a lot of time researching those funds, and they may do worse than the indexes.

Your best bet would be with one of the groups above or just dipping a toe into the "More" options.
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Old 01-12-2014, 10:24 PM   #14
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Thanks for the immediate responses.

Appreciate if there are other suggestions. I know I need to learn more about this.

Thanks
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