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Old 08-19-2022, 02:20 PM   #21
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I moved all of DW's holdings from UBS to Fido like you are planning to do with EJ. Some time previously, UBS bought Paine-Webber, so DW was stuck with UBS.
I transferred her holdings to Fido, then looked at the expense ratios of her funds and they were ridiculous. I sold out the funds and bought equivalent Fido funds.
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Old 08-20-2022, 06:29 AM   #22
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This is what I came up with:

I made a call to Fidelity about transfer fees. If the account is over 25k they will cover the fee. I have a mostly inactive traditional IRA and another account less than 25k. The person on the phone gathered my contact info and is going to have someone call me back to talk more.

Since then I opened a Fido account to get a feel for the company. I put a $20 in and built a watchlist. I will buy two ETFs from my list on Monday.

I sent a message to EJ. I wanted to verify my fees. I believe we pay $40 for the first account plus $20 for each additional account. I will verify if I do or do not pay an overall management fee as I cannot see that I am. I have a "select account". I looked up my trade slips and I pay 5% for MF's and 2% for Stocks and ETF's. There may be a sell commission. I probably have not sold anything in 5 years.

As I work through this, I need to at the very least stop the American Funds at 5% Load/Commission in our Roth.It is handicapping me at the front. I will either move to a 4 types of ETF's (with or w/o EJ) or divert my Roth IRA (we max both of them out every year) or increase our Roth TSP to make up for the difference on our Roth IRA.

I may even pause my EJ stuff and fool with Fido for a calendar year and not transfer my EJ stuff as I do not believe we are paying a management fee.

For the record, I am not mad or disappointed in EJ. I have been working with the same guy for almost 10 years. We meet over the phone once a year and we talk as needed. I get what I pay for as in "full service". The American funds thing is also my fault as I did not ask or didn't look at some aspects of it when I said to go that route. In the end I am the decision maker and I carry some responsibility.

More to come.
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Old 08-20-2022, 04:42 PM   #23
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Yes my American funds are cl A. The load expense is water under the bridge. They perform well but the expense ratio is high. Likely I would let them grow and stay in my portfolio and reinvest in cheaper funds going forward.
Yeah as long as you stop reinvesting you could hold at least for a while. The EJ rep in my mother's case wasn't all that much fun to deal with so I was glad that we just transferred everything at once. My wife was able to get some American funds w/o a load through a 401k. They seemed pretty good.
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Old 08-21-2022, 03:38 AM   #24
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stygz, you can buy American Funds from Fidelity with no load because they're not a full service firm. Like I mentioned earlier, compare what you're considering buying with what you've got already. IF you find you have good funds already, it's likely easy to transfer them. Dumping a fund company because just because you heard "all active funds are bad" is ill-advised. Do your due diligence and do whatever you think is best. If "beating the S&P500 index" is all you're interested in (and I hope it's not) their oldest fund has beat the index since inception, for over 80 years. People can twist numbers around, but that's an impossibility according to many.
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Old 08-21-2022, 07:50 AM   #25
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I did some more examining of my fees with EJ. Under my current plan and investment strategy, I am paying about $1,200 a year. This includes a the 5% load on my American Funds, 2% in our taxable account (ETFs), and account maintenance fees on a $225k account that invests $2500 a month.

If I were to drop the American funds and divert the money to a few ETFs, my yearly fees across all my accounts would drop to about $720.

I will say this particular year our fees were higher as we put about $14k into google on a one time purchase. This is not a recurring thing. Yes, I could have done that buy on Fidelity for $0.

Considering many are paying 1%+ for a managed account, my numbers seem much less.

Am I missing something?
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Old 08-21-2022, 07:57 AM   #26
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stygz, you can buy American Funds from Fidelity with no load because they're not a full service firm. Like I mentioned earlier, compare what you're considering buying with what you've got already. IF you find you have good funds already, it's likely easy to transfer them. Dumping a fund company because just because you heard "all active funds are bad" is ill-advised. Do your due diligence and do whatever you think is best. If "beating the S&P500 index" is all you're interested in (and I hope it's not) their oldest fund has beat the index since inception, for over 80 years. People can twist numbers around, but that's an impossibility according to many.
From the American Funds prospectus dated 1 Mar 2022, page 6:

12.18% Class A shares total return since 1/1/1934
12.72% S&P 500 total return since 1/1/1934

https://www.capitalgroup.com/individ...004-555421.pdf

And they didn't do any better over 1, 5 or 10 years. And this is from American Funds own prospectus. Data don't lie.
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Old 08-21-2022, 08:15 AM   #27
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Originally Posted by corn18 View Post
From the American Funds AIVSX prospectus dated 3 Mar 2022, page 6:

12.18% AIVSX total return since 1/1/1934
12.72% S&P 500 total return since 1/1/1934

Data don't lie.

https://www.capitalgroup.com/individ...004-555421.pdf
Does that include the FE load, fees, or the 12B-1 fees? [emoji4]
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Old 08-21-2022, 09:01 AM   #28
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Originally Posted by stygz View Post
Thank you for the responses. I will have to ask about Fidelity bonuses and transfer reimbursement.

Yes my American funds are cl A. The load expense is water under the bridge. They perform well but the expense ratio is high. Likely I would let them grow and stay in my portfolio and reinvest in cheaper funds going forward.

Good to know my cost basis should move with Fido. I have already started to ask Fido some questions.

I mentioned to my EJ advisor about the high expenses with American Funds. I asked about doing some ETF's. Basically I pay a 4% load on American Funds to buy and no cost to sell. With the ETF, I pay 2% to buy and 2% to sell....basically the same but I get a better number up front for slightly better growth.
Paying an upfront 4% load usually not a good idea. Upfront loaded funds or front and back 4% total is not an arrangement almost anyone here would feel comfortable with.
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Old 08-21-2022, 07:05 PM   #29
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Good lord, a 5% load? You are being robbed. Funds with loads have to overcome the load to make money and even if that fund does well that's 5% lost forever and that will never compound. Personally, I would not own any fund that charges a load, front, back or ongoing, heck I wouldn't own a fund that charges an ER of 25 or 30 bp!
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Old 08-21-2022, 07:58 PM   #30
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Quote:
Originally Posted by corn18 View Post
From the American Funds prospectus dated 1 Mar 2022, page 6:

12.18% Class A shares total return since 1/1/1934
12.72% S&P 500 total return since 1/1/1934

https://www.capitalgroup.com/individ...004-555421.pdf

And they didn't do any better over 1, 5 or 10 years. And this is from American Funds own prospectus. Data don't lie.
First off, good for you for actually doing the research. Most people would just recite something they heard about active funds and walk away. But the prospectus can be hard to read, and you misread it.

You're referring to the S&P 500 total return from class f2 inception. Since 8/1/2008 the return since 1/1/1934 was 11.22%. To correct/summarize:
12.18% Class A shared total return since 1/1/1934
11.22% S&P 500 total return since A share inception is 1/1/1934


Keep in mind this is a conservative growth and income mutual fund. Their more aggressive funds have done even better. And yes, their performance not just in this fund but for most have lagged a bit during this 14yr bull market. They are a value firm - generally when things are great they lag and when the crap hits the fan (say, 2000-2002) they shine. They've expressed this for decades.

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Does that include the FE load, fees, or the 12B-1 fees? [emoji4]
Yes, that includes a full 5.75% up front load (the average charge fyi is 3.5%, and if you don't want full service you can get these for no load from Fidelity, etc)) AND the 12b1 fee. Every firm or fund company will include those 12b1 fees when reporting performance. It's not some secret.

With this clarification, people can either think "Wow, better than I thought" or, keep digging for holes. If you're going to do the second, be intellectually honest enough to do the first. And if you want more info on American Funds, I know them VERY well. They're not for everyone, and I'm not suggesting everyone own them, but I would like everyone to base their decisions on facts and not hearsay or dogma. There's a lot of garbage repeated over and over out there.
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Old 08-21-2022, 08:11 PM   #31
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Originally Posted by stygz View Post
I did some more examining of my fees with EJ. Under my current plan and investment strategy, I am paying about $1,200 a year. This includes a the 5% load on my American Funds, 2% in our taxable account (ETFs), and account maintenance fees on a $225k account that invests $2500 a month.

If I were to drop the American funds and divert the money to a few ETFs, my yearly fees across all my accounts would drop to about $720.

I will say this particular year our fees were higher as we put about $14k into google on a one time purchase. This is not a recurring thing. Yes, I could have done that buy on Fidelity for $0.

Considering many are paying 1%+ for a managed account, my numbers seem much less.

Am I missing something?
(quick note: IF your household has over $100k total in American Funds it should be a 3.5% load)

You might be overthinking this a bit. If you want the advice and service of EDJ or some other full service firm, you'll end up paying fees similar to what you're paying. If you want to buy similar (and in many cases the same) investments without that advice and service, use a self service firm. As for the specific mutual fund ongoing expenses, just ask yourself "What did I get for my x% a year?" If YOU think the performance (return, volatility, etc) warranted that expense, great. If not, make a change. Apparently I'm one of the few people here who think you can make a wise decision either way.

Whatever you do, just try to keep the big picture (10+ years if possible) in mind. Buying or selling because of shorter term performance is historically a bad decision. And try to ignore "all or nothing" thinking. Someone telling you you can't do it on your own, or that there's no value in professional advice are both wrong.
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Interesting but ……
Old 08-21-2022, 09:21 PM   #32
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Interesting but ……

Quote:
Originally Posted by arcyallen View Post
First off, good for you for actually doing the research. Most people would just recite something they heard about active funds and walk away. But the prospectus can be hard to read, and you misread it.

You're referring to the S&P 500 total return from class f2 inception. Since 8/1/2008 the return since 1/1/1934 was 11.22%. To correct/summarize:
12.18% Class A shared total return since 1/1/1934
11.22% S&P 500 total return since A share inception is 1/1/1934


Keep in mind this is a conservative growth and income mutual fund. Their more aggressive funds have done even better. And yes, their performance not just in this fund but for most have lagged a bit during this 14yr bull market. They are a value firm - generally when things are great they lag and when the crap hits the fan (say, 2000-2002) they shine. They've expressed this for decades.



Yes, that includes a full 5.75% up front load (the average charge fyi is 3.5%, and if you don't want full service you can get these for no load from Fidelity, etc)) AND the 12b1 fee. Every firm or fund company will include those 12b1 fees when reporting performance. It's not some secret.

With this clarification, people can either think "Wow, better than I thought" or, keep digging for holes. If you're going to do the second, be intellectually honest enough to do the first. And if you want more info on American Funds, I know them VERY well. They're not for everyone, and I'm not suggesting everyone own them, but I would like everyone to base their decisions on facts and not hearsay or dogma. There's a lot of garbage repeated over and over out there.

Thanks for sharing this but I have a few questions. I am assuming you pulled all this information from the prospectus. How were you able to pull a return number for the S&P 500 from 1934 when the index did not come into creation until 1957? I don’t think Standard and Poors as a corporation actually came into creation until 1941. Has the fund had the same investment objective since 1934? Capital Group seems like a good firm and relative to other active managers has competitive fees but I don’t think highlighting point-in-time figures (1,3,5,7,10,14yr a/o of a static date) gives one a good idea of whether the manager can add value on a consistent basis. Why not talk about the rolling 3yr returns numbers over the last 5,7,10, 15, 20 years assuming the investment objective and benchmark have been the same. Going back to 1934 does not tell me too much on what I can expect as investor going forward especially considering the size of the fund today. Wouldn’t you agree?
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Old 08-21-2022, 10:49 PM   #33
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Thanks for sharing this but I have a few questions. I am assuming you pulled all this information from the prospectus. How were you able to pull a return number for the S&P 500 from 1934 when the index did not come into creation until 1957? I don’t think Standard and Poors as a corporation actually came into creation until 1941. Has the fund had the same investment objective since 1934? Capital Group seems like a good firm and relative to other active managers has competitive fees but I don’t think highlighting point-in-time figures (1,3,5,7,10,14yr a/o of a static date) gives one a good idea of whether the manager can add value on a consistent basis. Why not talk about the rolling 3yr returns numbers over the last 5,7,10, 15, 20 years assuming the investment objective and benchmark have been the same. Going back to 1934 does not tell me too much on what I can expect as investor going forward especially considering the size of the fund today. Wouldn’t you agree?
Awesome, lots of great points and questions!

I thought I attached my source, sorry. See attached. I've seen several sources (like https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html) cite an S&P500 metric going back before 1957. I don't know where they all get their info, but I assume they literally just looked at the market caps from before an official metric was announced and did the math. If you ever find out an official answer, I'd be curious to know it.

As far back as I can find, every American Fund (including AIVSX) has kept their objectives pretty steady. They've acted consistently even when it's unpopular like during the tech boom.

I agree that single timeframe measurements aren't useful on their own, but taken in consideration all together and with rolling time frames they are. If you look at marketing material American uses rolling time frames often. The one I'm enclosing actually mentions one. If a mature fund has performed well since inception, I think it's a great starting point.

I think what the fund did 80 years has minimal bearing on today, except that it, taken with the big picture, demonstrates they've been consistent in their performance and philosophy: own quality investments for long periods of time so they can focus on the long term while avoiding fads...even if it makes them look bad in the short term.

I'll be away from my laptop for a few a bit so I'll respond to anything else when I get to back to it in a few days - I hate typing much on a phone!
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Old 08-22-2022, 06:19 AM   #34
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Originally Posted by stygz View Post
I did some more examining of my fees with EJ. Under my current plan and investment strategy, I am paying about $1,200 a year. This includes a the 5% load on my American Funds, 2% in our taxable account (ETFs), and account maintenance fees on a $225k account that invests $2500 a month.

If I were to drop the American funds and divert the money to a few ETFs, my yearly fees across all my accounts would drop to about $720.

I will say this particular year our fees were higher as we put about $14k into google on a one time purchase. This is not a recurring thing. Yes, I could have done that buy on Fidelity for $0.

Considering many are paying 1%+ for a managed account, my numbers seem much less.

Am I missing something?
You are paying a lot less than many and only a portion of the expense ratio of your American funds is kicked back to EJ. The 1% AUM that folks pay doesn't include fund expense ratios.
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Old 08-22-2022, 06:20 AM   #35
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Awesome, lots of great points and questions!

I thought I attached my source, sorry. See attached. I've seen several sources (like https://pages.stern.nyu.edu/~adamoda...histretSP.html) cite an S&P500 metric going back before 1957. I don't know where they all get their info, but I assume they literally just looked at the market caps from before an official metric was announced and did the math. If you ever find out an official answer, I'd be curious to know it.

As far back as I can find, every American Fund (including AIVSX) has kept their objectives pretty steady. They've acted consistently even when it's unpopular like during the tech boom.

I agree that single timeframe measurements aren't useful on their own, but taken in consideration all together and with rolling time frames they are. If you look at marketing material American uses rolling time frames often. The one I'm enclosing actually mentions one. If a mature fund has performed well since inception, I think it's a great starting point.

I think what the fund did 80 years has minimal bearing on today, except that it, taken with the big picture, demonstrates they've been consistent in their performance and philosophy: own quality investments for long periods of time so they can focus on the long term while avoiding fads...even if it makes them look bad in the short term.

I'll be away from my laptop for a few a bit so I'll respond to anything else when I get to back to it in a few days - I hate typing much on a phone!
So what is the explanation for the under performance for the 1 year, 5 year and 10 year vs. the S&P 500?
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Old 08-22-2022, 06:26 AM   #36
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Going back to 1934 seems kind of pointless to me, so I just looked at what Morningstar says of the last ten years.

AIVSX total return 11.53%
Category 12.33% (Large Blend)
Index 13.59% (Morningstar US LM TR USD)

Doesn't appear to be world-beating performance to me.
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Old 08-22-2022, 07:15 AM   #37
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You are paying a lot less than many and only a portion of the expense ratio of your American funds is kicked back to EJ. The 1% AUM that folks pay doesn't include fund expense ratios.
From what I can tell I don’t have a AUM fee. I have a select account. I basically pay as I buy/sell.
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Old 08-22-2022, 07:47 AM   #38
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Going back to 1934 seems kind of pointless to me, so I just looked at what Morningstar says of the last ten years.

AIVSX total return 11.53%
Category 12.33% (Large Blend)
Index 13.59% (Morningstar US LM TR USD)

Doesn't appear to be world-beating performance to me.
No, it isn't. Now do AGTHX. That's the only American Fund I've found that consistently beats the S&P500. AMCAP has also beat the index over many time spans.
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Old 08-22-2022, 08:12 AM   #39
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Again, per their prospectus, none of the American Funds have beat the S&P 500.
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Old 08-22-2022, 09:25 AM   #40
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From what I can tell I don’t have a AUM fee. I have a select account. I basically pay as I buy/sell.
That's their traditional arrangement but they do have AUM options from what I understand. If you pay attention and don't trade too much you can hold down costs.
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