Leaving EJ for Fidelity- what to know?

[Qs Laptop]

Yep, and I’d be surprised if you get a response with a ticker and data. But way to do your research!

I've already provided a ticker and charts showing that at least one American Funds mutual fund consistently beats the index. The data is just a couple of posts upstream.

I am not an Edward Jones apologist nor an American funds apologist, as I left EJ for Fidelity 4 years ago.

 

[tulak]

Please explain how transferring to Fidelity reduces the impact of the load that has been paid. I can't think of any better example of a one time cost than a paid initial load.

Once you pay the load, the damage is done. There is no benefit to transferring the fund or leaving it at EJ, unless EJ charges more for holding the fund.

My point was that less was invested in the fund due to the load, so you are losing out on gains in future years, not only in the first year.

 

[tulak]

I've already provided a ticker and charts showing that at least one American Funds mutual fund consistently beats the index. The data is just a couple of posts upstream.

I am not an Edward Jones apologist nor an American funds apologist, as I left EJ for Fidelity 4 years ago.

AGTHX is compared to VFINX, which is not an apple to apples comparison. AGTHX is classified as a growth fund, so it should be compared to an equivalent index growth fund. I found VIGRX, but unfortunately the data for that fund only goes back to 1993.

AGTHX still did better than VFINX, 11.07% vs 10.3% CAGR, starting in 1993. After account for load, you’d have 211k vs 181.7k. So for this time frame, AGTHX did better than an equivalent index fund.

But if I enter 2002 as a start date, AGTHX does worse than VIGRX. Pick 2008 and even VFINX had better performance. And of course, none of this accounts for less invested due to the AGTHX’s load. It looks like pretty much any year after 2002, VIGRX does better and VFINX is a strong contender (outperforming for the last 15 years or so).

 

[Qs Laptop]

AGTHX is compared to VFINX, which is not an apple to apples comparison. AGTHX is classified as a growth fund, so it should be compared to an equivalent index growth fund. I found VIGRX, but unfortunately the data for that fund only goes back to 1993.

Well, when someone says "the index" I assume they mean the S&P500 index. That is the benchmark that is traditionally used when comparing investment results with "the index".

Pick 2008 as your endpoint? Really? Take the anomaly of the worst and longest market crash of a generation and use it as an endpoint.

You are cherry picking endpoints and also changing the metrics of the comparison from "the index" to "the Vanguard growth index" to get your results.

 

[tulak]

Well, when someone says "the index" I assume they mean the S&P500 index. That is the benchmark that is traditionally used when comparing investment results with "the index".

Pick 2008 as your endpoint? Really? Take the anomaly of the worst and longest market crash of a generation and use it as an endpoint.

You are cherry picking endpoints and also changing the metrics of the comparison from "the index" to "the Vanguard growth index" to get your results.

None of the dates I mentioned are endpoints.
You’re right, that wouldn’t make sense. They are all starting years going to 2022.

You should pick equivalent indexes when making comparisons. So yeah, growth fund vs index growth fund makes sense to me.

Since 2002, the growth index fund did better than the American Fund. Prior to that, the American Fund did better. Which will do better over the next 20 years? Idk.

 

[stygz]

Took a couple steps yesterday.

I sent a message to EJ to pause my automatic investments as we are doing some reorganization.

I decided to put together a 2 fund portfolio. Compared my five American funds to my couple choices on a fund analyzer. Turned out over a few year period my 2 fund would have averaged just under 15% while my EJ plan would have been just under 11%. Here is the kicker, my 2 fund portfolio at its lowest point would have lost a notable less amount of money. I would normally look at a longer period but one of my funds is only a few years old.

I am not even sure if the analyzer calculated loads and other fees associated with American funds. So the gap could be even more.

Once I get confirmation with EJ, I am going to set up a Roth for my wife and I and automatic investing at Fidelity using the two mutual funds (fxaix and fzilx) 80/20. I am also going to start building our taxable account on the Fido side using VOO and IJH as I was at EJ. Not sure when I will actually move our money over as it don’t cost me anything just to leave it…..except I do need to dump the American funds using Fido so I don’t pay a trade fee like I would with EJ.

My only thing I am not liking so far with Fidelity is I am not able to set up auto investing into ETFs….only MFs. I may have to go in early in the month to make my buy.

 

[RetMD21]

Not sure when I will actually move our money over as it don’t cost me anything just to leave it…..except I do need to dump the American funds using Fido so I don’t pay a trade fee like I would with EJ.

Maybe I am misunderstanding, but for the class A shares isn't the load just charged at purchase? Still no harm in transferring then selling

My only thing I am not liking so far with Fidelity is I am not able to set up auto investing into ETFs….only MFs. I may have to go in early in the month to make my buy.

This is common with ETFs. Maybe universal.

 

[stygz]

Maybe I am misunderstanding, but for the class A shares isn't the load just charged at purchase? Still no harm in transferring then selling




This is common with ETFs. Maybe universal.

That is correct. There is 12b fees and the funds seem basically redundant to what I was looking at.

 

[arcyallen]

So what is the explanation for the under performance for the 1 year, 5 year and 10 year vs. the S&P 500?

Shorter term time frames are pretty meaningless to me. Usually 10 years is a good length of time, but if there's no real bear market in there it becomes less useful. But to answer the question:

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.

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.

See above. I feel like if they had beat the indexes for the last decade, you might just say "Yeah, but look at since inception, they just got lucky" Both measurements are useful, especially taken together. As for world-beating performance, find me another fund company that has practically all their equity funds beating their benchmarks since inception (which, if I was forced, would choose any day as a standalone timeframe over a 1,3,5,10yr etc) and I'll be VERY interested. The point to going back 80 years is to see consistency in what they do. If you like the results of that consistency, great. If not, that's fine too. Personally if the next twenty years the world "looks the same" as the last twenty years, I'd expect the funds would perform similarly. If things got rocky, I'd also expect them to perform similar to previous rocky times. Again, if you like what they've done during all those times, this is a reason to be in. If you don't, it's a great reason to be out. I'm fine with whatever people decide.

Since 2002, the growth index fund did better than the American Fund. Prior to that, the American Fund did better.

It's tidy to use round numbers like twenty years, but you may find it more helpful to instead measure a full market cycle, or at least start and end at the same part of the cycle. Peak to peak or trough to trough. If you measure peak to trough or trough to peak (which would be 2002 to 2022) they numbers can look crazy.

 

[arcyallen]

Not sure when I will actually move our money over as it don’t cost me anything just to leave it…..except I do need to dump the American funds using Fido so I don’t pay a trade fee like I would with EJ.

If it's somehow beneficial to you, they EJ shouldn't be charging you anything to sell an A share unless you bought it at a 0% front end load because you had over $1m with them and sold within the first year.

 

[richardf]

Fidelity is fine

I am considering moving over the next few months from EJ to Fidelity. I own multiple ETFs and mutual funds. Some of the Mutual funds are with American. I read somewhere I may be charged a 1% fee on the ones less than a year old. Anyone know if this? I also read of people getting some of the transfer fees covered by Fidelity..

What else do I need to be prepared for leaving a full service place? What about record keeping type stuff for taxes and such? I assume Fidelity provides all my tax forms at the end of the year such as 1099r. I saw somewhere a fee for record keeping is why I ask.

Will my cost basis carry over to Fidelity?

We have 2 Roth accounts, 2 trad IRAs, a taxable account, and a inherited IRA.

I am trying to learn and gather the pit falls.

I have been browsing Fidelity and found a few mutual funds and ETFs that I would use to build my portfolio with. I also have the TSP. At a very minimum I would stop with our Roth’s at EJ (American Funds) and make up for it in my Roth TSP.

If we make the full move to Fidelity, it would be at the new year. To get a cleaner break. I like the EJ guy as he has taken us further than we would have been ion our own over the past decade. But the cost going forward are high and I am more willing to do some work and planning at my stage in life.

FYI I am 41 and wife is 40. We are planning on retiring at 58 from federal service / military. This whole rabbit hole started on a recent post of the money guys and talking about American Funds.

I opened a Fidelity account and got 12 of their no commission ETF’s. It is a great account, investing, banking, credit and debit cards. The online site is is great for checking you account and have now started to buy CDs from their offerings. Excellent rates with some good features like monthly deposits and renew automatically.