Whats your overall expense ratio?

[Nords]

Quote:

Originally Posted by mathjak107 shouldnt it be expense ratio vs return..i dont mind paying a little extra for performance...

Well, that would be an interesting study.

I don't mind paying for performance either, as long as my money is promptly & cheerfully refunded when the performance fails to materialize. Is that how your fund managers are doing business? Or do they get to keep your fees no matter what happens?

Even worse, do they get more of your money when you have more? A $4B mutual fund isn't twice as expensive to run than a $2B mutual fund, yet most fund managers get twice as much money for achieving fund bloat instead of for doubling returns.

Quote:

shouldnt it be expense ratio vs return..i dont mind paying a little extra for performance...

Plenty of studies to show that load funds don't perform better.

[mickeyd]

.13 but I'm a hell of an indexer who refuses to give away even one BP that I can retain.

I'm happy as hell to just beat most of the pack if I can do it on the cheap! 8)

[mathjak107]

well while there is no correlation between fund expenses and performance this is true...in my case i have been using a fidelity fund oriented newsletter for decades now.the performance is excellent.far better than i could have done on my own and with a lot more discipline than i could have done on my own.the actively managed funds the newletter uses as a diversified mix have out performed any index or etf combo i was able to put together on my own as i always have a few hypothetical ones going just to see if i would do better with no management.the less than 1% er i pay a year may be high by index standards but im very happy with the overall performance...the last few years certainly have been a stock pickers market leaving most index's way behind...right now as far as managed funds fidelity has the lowest costs and biggest selection around allowing very nice diversified mixes to be put together that work well...id love an er of .25 but im not willing to give up any performance.

[unclemick]

Belief in managed fund performance is male(unusually so) biological and an incurable disease. Expenses matter.

Note that even indices sliced too thin can experience high turnover rates - a cost not easily teased out but there just the same.

Took over twenty years to convince myself - since it is incurable - still play with 15% of my portfolio.

[samclem]

I agree on all counts. Intellectually I am convinced that active management and short-term timing don't improve performance, but the call to the dark side is strong. I'm tempted to test the waters when I see the latest back-tested system yielding 20% annually or even the results from "truly in existence" newsletter/advisor portfolios (that I know often ignore the frictional factors of taxes, advisor/subscription costs, etc). I may eventually carve out a small amount as you've done to satisfy the urge to tinker with things.

I subscribed to a newsletter when I first started investing, and I built one of their model portfolios using my real money. The model portfolio had a really good performance record going back many years. On "Black Monday" in Oct 1987, when stocks plunged about 23% in one day, I called the recorded 800 number provided by the newsletter to find out what they were recommending (this was before the Internet). Well, imagine my surprise to learn that, according to the recorded voice, they had recommended that investors sell stock funds and go to cash on 17 October, two days before the plunge. How convenient. I then understood how they had achieved their remarkabe performance record. Maybe these guys can't get away with this anymore given the transparency offered by the Internet.

samclem

[retire@40]

When you calculate your ER, do you base it on your entire portfolio including cash accounts or just your non-cash portfolio?

For example, a portfolio of 100% S&P might have a .18% ER.

A portfolio of all cash has a 0% ER.

Would a portfolio of half of each give you a .09% ER?

[Nords]

Quote:

Originally Posted by retire@40 When you calculate your ER, do you base it on your entire portfolio including cash accounts or just your non-cash portfolio?

How 'bout this:
- List all the investments in your retirement portfolio. If cash is a part of your portfolio, then list it. Include the fair market value of the beaver cheese futures as well.
- List the % portion of the total that each investment comprises in the portfolio.
- List the investment's ER.
- Multiply the % portion times the respective ER.
- Sum the products.

Quote:

Originally Posted by retire@40 For example, a portfolio of 100% S&P might have a .18% ER. A portfolio of all cash has a 0% ER. Would a portfolio of half of each give you a .09% ER?

Yup. Is this a trick question?

Note that Fidelity Cash Reserves (FDRXX), what I consider a cash portion of our retirement account, has a 0.43% ER. OTOH our NFCU five-year CD has a 0% ER.

[retire@40]

Quote:

Originally Posted by Nords How 'bout this: - List all the investments in your retirement portfolio.* If cash is a part of your portfolio, then list it.* Include the fair market value of the beaver cheese futures as well. - List the % portion of the total that each investment comprises in the portfolio. - List the investment's ER. - Multiply the % portion times the respective ER. - Sum the products.

Thanks, that's how I did it, but just wanted some confirmation that cash accounts, US bonds, etc should be included since I saw some pretty low ERs in the poll.* Just finished mine.* I was predicting about .25, but came in at .42.

You are right, I never paid attention to the ER in money market accounts, but they are higher than some of my equity accounts.* I don't get it.

So I take it US bonds have no expense ratio?* There has to be some built-in cost to running the program.* Or are those expenses paid with "outside" money?

[cute fuzzy bunny]

See, there you go again. I dont count cash positions as part of my ER, so mine is actually a little lower than I said it was...

[justin]

Quote:

Originally Posted by retire@40 Just finished mine. I was predicting about .25, but came in at .42.

I had the same experience. I predicted (and responded to the poll) that I had a 0.3-0.4% ER, but after calculating the exact number, it was ~0.57%. My guess is many poll responders are optimistic. As I did, they probably overlooked those funds with 0.5-1% ER's (active small cap or international/emerging markets funds) and focused on their big chunk of 0.18% (or 0.1%) S&P 500 index at Vanguard. Even though we have plenty of Fidelity Spartan at 0.1% and VG institutional shares at 0.08%, the actively managed funds at American funds we have are 0.5-0.7% ERs.

[bpp]

Quote:

I had the same experience.

I thought it was 0.27, but rounded up to 0.3-0.4. Upon re-examination, it looks more like 0.4 when all miscellaneous costs are figured in, so I barely squeaked it out.

Bpp

[larry]

.43 here.

[mickeyd]

Quote:

I never paid attention to the ER in money market accounts, but they are higher than some of my equity accounts. I don't get it.

I noticeed this also. I believe that the reason is that they offer extra stuff (checking account) and have many trades since the investments are such short term instraments that require cashing in and buying something else with the proceeds. Many trades=many expenses.

[wallygator69]

Hi,

Anyone willing to share an Excel spread sheet for keeping track of their mutual funds. Name, symbol, Expense ratio, yield, NAV, purchase price, ytd return etc.

I have minimal Excel expertise. I can set something up but it would take me quite a while and I am also curious as to what detail some of the folks here track and think is valuable.

I have the big kiss off meeting with my friend/FA on the 29th.

Thanks,

Wally

[lazyday]

Quote:

Originally Posted by Nords Fidelity Cash Reserves (FDRXX) claims an ER of 0.43%. For a money market?!? What's up with that?

I haven't used it, but Fido also has a Spartan short term bond index, at .2% or .1% ER depending on balance.

If the "cash reserves" fund is for cash sweep, with no minimum in practice, then a .43% ER but fair yield would be much better than most brokers, which pay next to nothing on cash balances. (VG is good on cash balances though, I believe.)

I'm in the habit of keeping cash balance very close to zero, from using brokers that pay perhaps 1/4 what T-bills do.

[lazyday]

Quote:

Originally Posted by Maddy the Turbo Beagle from the responses here and another thread, it looks like the folks that work for government have the lowest cost savings plans.

I agree. But even without government plans, it's possible to have a rock bottom ER:

-VTI total US market, .07%
-individual TIPS, 0%
-individual other Treasuries, 0%
-VGK, Europe .18%
-VPL, Pacific .18%
-VWO, EmgMkts .30%

With a "typical" asset allocation using the above, should be easy to get under .15%; even under .1% for someone who likes bonds/cash.

Even using small and value tilts in US, ER can stay very low, as VG has ERs there still quite low. VTV .11%, VB .1%, VBR .12%.

(my ER is a little over .4%, largely because of OAKEX, PCRIX, and HAINX. Used to be much worse, when half my portfolio was OAKEX!)

[Nords]

Quote:

Originally Posted by lazyday If the "cash reserves" fund is for cash sweep, with no minimum in practice, then a .43% ER but fair yield would be much better than most brokers, which pay next to nothing on cash balances. (VG is good on cash balances though, I believe.)

7-day yield of 4.22%, I'm not complaining about that.

I would have expected a money market fund to be cheaper to run than the DOW Dividends ETF (DVY, 0.40), the S&P600 Small-cap Value ETF (IJS, 0.25) and your short-term bond fund. It's hard to believe that the 0.43 ER is justified and not just an excuse to rip off the shareholders.

Fidelity's "core account" used by the brokerage to settle trades & pay bills is their municipal money market (FTEXX), currently paying a whopping 2.75 with an ER of .0.45%. And Lipper claims that the MM average ER is 0.71%.

I need to start a mutual fund. It'll just be a money market paying a fraction under the APY of 7-year CDs. With enough customers I'll be able to beat Fidelity's ERs!

[lazyday]

Quote:

Originally Posted by Nords I would have expected a money market fund to be cheaper to run than the DOW Dividends ETF (DVY, 0.40), the S&P600 Small-cap Value ETF (IJS, 0.25) and your short-term bond fund. It's hard to believe that the 0.43 ER is justified and not just an excuse to rip off the shareholders.

If this fund were mainly a cash balance fund for brokerage accounts, I could see a high ER, if it were typically used with very small balances and for short time periods. Still have to mail out annl reports and such.
Even VG's money market funds have ER of .3%.

---I can't believe I'm defending a high ER! What's wrong with me?!

Of course .43% is excessive if VG can do it for .3%. But Fido wants a profit...

I guess the .43% is (if used for cash sweep) less of a rip off than most brokers, but more of a rip off than VG's brokerage.


> Fidelity's "core account" used by the brokerage to settle trades & pay bills is their municipal money market (FTEXX), currently paying a whopping 2.75 with an ER of .0.45%.

If that's tax free, I'd guess you'd use a different fund in an IRA.
I read in a post somewhere (sorry don't recall which forum) that you can change your sweep fund at Fido. Maybe they have one with a lower ER. Not sure if you could use the Spartan funds--may really need to get up to min balance to do so, which I think is $10K.


> I need to start a mutual fund.

ugh, sounds like too much work!