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Vanguard funds deliver peer-beating returns
Old 01-30-2012, 11:49 AM   #1
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Vanguard funds deliver peer-beating returns

I am admittedly biased, so I am not suggesting there aren't other good funds and investing approaches. I enjoyed the interactive chart of 1-3-5-10 year performance by fund type near the end of the article. I was surprised at their weakest category?

https://personal.vanguard.com/us/ins...ormance-012012
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For the 12-month period ended December 31, the broad U.S. stock market had a slight return of 0.52%, while international stocks returned –13.71%. The broad U.S. bond market returned 7.84%. Despite the period's volatile investment backdrop, 81% of Vanguard funds outperformed the average returns of their respective peer groups for the 12 months.
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Old 01-31-2012, 05:01 PM   #2
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I missed this... and am surprised no comments...

Thanks for the post...
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Old 01-31-2012, 05:16 PM   #3
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Originally Posted by Midpack View Post
I am admittedly biased, so I am not suggesting there aren't other good funds and investing approaches. I enjoyed the interactive chart of 1-3-5-10 year performance by fund type near the end of the article. I was surprised at their weakest category?

https://personal.vanguard.com/us/ins...ormance-012012

I'm a bit confused by the data. Are the percentages given the percent of same category funds that Vanguard funds, of that same category, outperformed? Or are they saying that the percentage is the number of Vanguard funds that outperformed the Lipper average for that categoy divided by total funds in that category?
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Old 02-01-2012, 07:18 AM   #4
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Even without studying the link or Vanguard's data, the headline makes sense to me. If many (most?) Vanguard funds are built to match an index's performance, and the competitor's managed funds have a record like this, it is no surprise that Vanguard funds outperform their peers:

source: The Failure of Active Management McLean Heuristics

Some raw data from S&P here:
S&P Indices versus Active Funds - 1H 2011
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Old 02-01-2012, 09:04 AM   #5
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Originally Posted by youbet View Post
I'm a bit confused by the data. Are the percentages given the percent of same category funds that Vanguard funds, of that same category, outperformed? Or are they saying that the percentage is the number of Vanguard funds that outperformed the Lipper average for that categoy divided by total funds in that category?
from the article:

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For the one-year period ended December 31, 2011, 10 of 10 Vanguard money market funds, 5 of 5 bond funds, 20 of 21 balanced funds, and 18 of 25 stock funds outperformed their Lipper averages. For the five-year period ended December 31, 2011, 11 of 11 Vanguard money market funds, 27 of 28 bond funds, 9 of 10 balanced funds, and 25 of 40 stock funds outperformed their Lipper averages. For the ten-year period ended December 31, 2011, 10 of 10 Vanguard money market funds, 20 of 21 bond funds, 5 of 5 balanced funds, and 18 of 25 stock funds outperformed their Lipper averages.
And in that chart, 81% of vanguard funds outperformed funds in their respective Lipper categories. For one year, there were 18,549 funds in the universe of funds they are comparing them to, and the vanguard funds beat 81% of their respective peers.
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Old 02-01-2012, 10:24 AM   #6
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from the article:



And in that chart, 81% of vanguard funds outperformed funds in their respective Lipper categories. For one year, there were 18,549 funds in the universe of funds they are comparing them to, and the vanguard funds beat 81% of their respective peers.
Luckily, I am invested in the other 19%........... J/K.........
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Old 02-01-2012, 10:26 AM   #7
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Perhaps this VG article is an indicator that there is more upside in the equities markets? I'd not expect such an article to appear when go-go fund companies are delivering +20% returns and Money magazine discusses the hot market segment to be in -- maybe that time will come again. Right now everyone wishes they had been holding Wellington or Wellesley last year.

BTW, we are with VG too. Equities fully indexed.
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Old 02-01-2012, 10:30 AM   #8
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Perhaps this VG article is an indicator that there is more upside in the equities markets? I'd not expect such an article to appear when go-go fund companies are delivering +20% returns and Money magazine discusses the hot market segment to be in -- maybe that time will come again. Right now everyone wishes they had been holding Wellington or Wellesley last year.

BTW, we are with VG too. Equities fully indexed.
That have virtually the same article every year. And the percentages are usually around 80% or so. Just a relic of the low costs of their funds (some of which are actively managed albeit at low cost).
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Old 02-01-2012, 10:31 AM   #9
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Luckily, I am invested in the other 19%........... J/K.........
Of course! If you don't index, why would you ever invest in any of the 81% that are going to underperform?
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Old 02-01-2012, 12:40 PM   #10
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Luckily, I am invested in the other 19%........... J/K.........
What?

I thought everybody that invested in actively managed funds either selected them at random or just bought one of everything.

Goes to show, you learn something every day.
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