LEIFX

[ferco]

Have about 50k in LEIFX. Expense ratio 1.12, YTD 2.2, 1 yr 6.09, 95% stock fund. Have owned holding about 4 years. Any suggestions for long term holding (> 10 years). Buy/Sell. Looking for 7-8% return. Already have Vanguard Wellington; thinking about selling the LEIFX and putting into Wellington. I don't like the 1.12 ER.

[brewer12345]

Holy cow! Looks like you paid a load on that one, too.

Probably time to cut your losses. Is this thing in a taxable account? If not, I would sell it and move to Wellington or another high quality, low cost fund of your chosing.

[JPatrick]

Quote:

Originally Posted by ferco Have about 50k in LEIFX. Expense ratio 1.12, YTD 2.2, 1 yr 6.09, 95% stock fund. Have owned holding about 4 years. Any suggestions for long term holding (> 10 years). Buy/Sell. Looking for 7-8% return. Already have Vanguard Wellington; thinking about selling the LEIFX and putting into Wellington. I don't like the 1.12 ER.

I'd dump it ASAP and hopefully before it spits out a December distribution.* A possible good switch would be FCVSX, but again, watch the distributions. Fido also has an excellent balanced fund in FBALX.

[Spanky]

Vanguard Equity Income Fund Investor Shares (VEIPX)

[wildcat]

Quote:

Vanguard Equity Income Fund Investor Shares (VEIPX)

2nd that one as a replacement. Pretty similar sector allocations as LEIFX and it has a higher yield & lower exp ratio.

[JPatrick]

Well here I am again up against the vanguards.*

Be certain to check the performance comparisons of your Wellington and VEIPX against FBALX.* I always look at Iyr, 2yr 3yr and 5 year.
I have a great deal of FBALX.
Tell me why I should switch*

[brewer12345]

FBALX is a good balanced fund, it is just more expensive than Wellington IIRC. Especially if it is in a taxable account, I wouldn't bother to switch.

[JPatrick]

Quote:

Originally Posted by brewer12345 FBALX is a good balanced fund, it is just more expensive than Wellington IIRC.* Especially if it is in a taxable account, I wouldn't bother to switch.

Low fees are delightful, but at the end of the day, when I'm at the store the fund with the greatest total return buys the most Corona.* 8)

[brewer12345]

Quote:

Originally Posted by JPatrick Low fees are delightful, but at the end of the day, when I'm at the store the fund with the greatest total return buys the most Corona.* 8)

I agree, but when we are talking about middle-of-the-road balanced funds with many, many billions of assets, it is pretty hard not to own the market. If that is the case, why pay extra?

[Spanky]

If we are still talking about a replacement for LEIFX, VEIPX is a good fit.

LEIFX VEIPX
Non-Load Adj. Returns
YTD 2.20 4.03
1 Yr 6.09 7.34
3 Yr 11.05 12.74
5 Yr 1.19 5.04
10 Year/Life† 6.97 10.03
Load Adj. Returns
YTD -3.42 --
1 Yr 0.26 --
3 Yr 8.98 --
5 Yr 0.06 --
10 Year/Life† 6.37 --

[brewer12345]

Spanky, got anything that shows the relative volatility of the two funds? Higher returns mean little if they require you to assume a lot more risk.

[Spanky]

Quote:

Originally Posted by brewer12345 Spanky, got anything that shows the relative volatility of the two funds? Higher returns mean little if they require you to assume a lot more risk.

LEIFX VEIPX
Beta 0.97 0.90
R2 0.91 0.89
Standard Deviation 10.14 9.50

[brewer12345]

No contest, then.

[JPatrick]

Quote:

Originally Posted by brewer12345 I agree, but when we are talking about middle-of-the-road balanced funds with many, many billions of assets, it is pretty hard not to own the market.* If that is the case, why pay extra?

What figure leads you to put this fund in the middle of the road?
Own the market?? If the market is the S&P you might want to compare FBALX with the S&P>

And speaking of performance---What kind of blind loyalty to papa vanguard is it that causes people to get all giddy over a fund like VEIPX that can't seem to even get in the top 30% 0f its peers anytime in the last 5 years??
CATEGORY (BY TOTAL RETURN)* *

Period Rank Funds in Category % Rank
Year To Date 873* * 1303* * * * * * * 67.00*
1-Month 1286* * * * *1398* * * * * * * *91.99
3-Month 1076* * * * *1380* * * * * * * *77.97
6-Month 913* * * * * * 1344* * * * * * * * *67.93
1-Year 635* * * * * * 1286* * * * * * * * * * 49.38
3-Year 510* * * * * * *1016* * * * * * * * * * 50.20
5-Year 233* * * * * * *686* * * * * * * * * * * * * *33.97

Can low fees possibly be that key to success?



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[brewer12345]

Quote:

Originally Posted by JPatrick What figure leads you to put this fund in the middle of the road? Own the market?? If the market is the S&P you might want to compare FBALX with the S&P> And speaking of performance---What kind of blind loyalty to papa vanguard is it that causes people to get all giddy over a fund like VEIPX that can't seem to even get in the top 30% 0f its peers anytime in the last 5 years?? CATEGORY (BY TOTAL RETURN)* * Period Rank Funds in Category % Rank Year To Date 873* * 1303* * * * * * * 67.00* 1-Month 1286* * * * *1398* * * * * * * *91.99 3-Month 1076* * * * *1380* * * * * * * *77.97 6-Month 913* * * * * * 1344* * * * * * * * *67.93 1-Year 635* * * * * * 1286* * * * * * * * * * 49.38 3-Year 510* * * * * * *1016* * * * * * * * * * 50.20 5-Year 233* * * * * * *686* * * * * * * * * * * * * *33.97 Can low fees possibly be that key to success? ADVERTISEMENT

If I am not mistaken, FBALX is a mix of bonds and equities, so comparing it to the S&P500 would make no sense. Comparing it to an automatically rebalanced multi-cap index plus the Lehman Agg would probably be closer to a reasonable comparison.

The problem with category rank is that we have no idea what the category is and whether it makes any sense to toss the fund in question in that category.

[JPatrick]

Quote:

Originally Posted by brewer12345 I agree, but when we are talking about middle-of-the-road balanced funds with many, many billions of assets, it is pretty hard not to own the market.* If that is the case, why pay extra?

Well to me your post implied that a fund of this size mimics the overall market so why not an index.* When someone says "the market" I think S&P 500.
The peer rankings I posted are from Yahoo.* If you've got other stats* that are more accurate please post them.
My point is this.* It is pretty easy these days to find a fund that consistently ranks in the top 30% of its peers and at the same time is no load and ranks well below average in fees.* If they don't have those traits I'll never understand why any one would buy them.

[brewer12345]

Quote:

Originally Posted by JPatrick Well to me your post implied that a fund of this size mimics the overall market so why not an index.* When someone says "the market" I think S&P 500. The peer rankings I posted are from Yahoo.* If you've got other stats* that are more accurate please post them. My point is this.* It is pretty easy these days to find a fund that consistently ranks in the top 30% of its peers and at the same time is no load and ranks well below average in fees.* If they don't have those traits I'll never understand why any one would buy them.

I said "the market" but I didn't say which one. US equities? Bonds? Venezuelan Beaver Cheese Futures?

Its easy to pick a fund in the top 30% of its peers. Its a little more work to sort out whether there was any actual risk-adjusted performance or whether the incremental return is due to taking more risk. It is even tougher to pick a fund that will stay in the top 30%. Given those odds, I'm inclined to pick a cheap index fund unless no such thing exists for the asset class.

[JPatrick]

Quote:

Originally Posted by brewer12345 I said "the market" but I didn't say which one.* US equities? Bonds?* Venezuelan Beaver Cheese Futures? Its easy to pick a fund in the top 30% of its peers.* Its a little more work to sort out whether there was any actual risk-adjusted performance or whether the incremental return is due to taking more risk.* It is even tougher to pick a fund that will stay in the top 30%.* Given those odds, I'm inclined to pick a cheap index fund unless no such thing exists for the asset class.

I wish you would have said* Venezuelan Beavers Cheese furtures futures in the first place.* I now understand your thinking completely.
I suppose they have an index for cheese beavers, eh?