mathjak107
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 27, 2005
- Messages
- 6,208
i happen to notice something very odd about VTSMX . that is vanguards total market fund .
the oddity is if you look at morningstars invester returns,unlike the investor doing worse than the fund as the typical results show the investor actually did better.
in fact the investor through timing actually beat the funds buy and hold return over almost every time frame.
is there a reason? maybe!
s&p 500 index funds are very popular in 401k's while total market funds are not.
looking at VFINX ,the s&p 500 fund which is popular with 401k's the results were the opposite. investors once again did worse than buy and hold.
401k investors for the most part are a pretty financially ignorant group and most have no clue what is going on so they basically just sit .(not a bad thing to do ).
basically the total market fund version was traded a lot more by more savy investors and institutions and had many investors who bailed out and timed the buy back better.
but what i found interesting was:
the fidelity version of their total market had more typical results .
investor returns over 15 years was 4.84 vs 5.13 for the total market fund.
it looks like vanguard seems to have more active traders in their total market fund that got luckier and timed their buys and sells better.
it has nothing at all to do with vtsmx being a bigger more diverse fund ,it only has to do with inflow and outflow timing.
in fact the 10 year returns showed the same results. a lot more trading and a lot better timing.
in fact what i said above is evident in vfinx's returns.
fund returns over 15 years were 4.36% , investor returns were a mere 2.29%. what a whopping difference in investor ability to call things right. you can clearly see the s&p 500 fund investors as a group got it wrong very badly .
that is unskilled investors bailing out of 401k's at the wrong time as opposed to the more savy group that tended to own the total market funds.
clearly as a group vanguards total market fund investors are not in the buy and hold camp and seem to be quite good at doing what they do compared to their less savy cousins in the s&p 500 funds..
the oddity is if you look at morningstars invester returns,unlike the investor doing worse than the fund as the typical results show the investor actually did better.
in fact the investor through timing actually beat the funds buy and hold return over almost every time frame.
is there a reason? maybe!
s&p 500 index funds are very popular in 401k's while total market funds are not.
looking at VFINX ,the s&p 500 fund which is popular with 401k's the results were the opposite. investors once again did worse than buy and hold.
401k investors for the most part are a pretty financially ignorant group and most have no clue what is going on so they basically just sit .(not a bad thing to do ).
basically the total market fund version was traded a lot more by more savy investors and institutions and had many investors who bailed out and timed the buy back better.
but what i found interesting was:
the fidelity version of their total market had more typical results .
investor returns over 15 years was 4.84 vs 5.13 for the total market fund.
it looks like vanguard seems to have more active traders in their total market fund that got luckier and timed their buys and sells better.
it has nothing at all to do with vtsmx being a bigger more diverse fund ,it only has to do with inflow and outflow timing.
in fact the 10 year returns showed the same results. a lot more trading and a lot better timing.
in fact what i said above is evident in vfinx's returns.
fund returns over 15 years were 4.36% , investor returns were a mere 2.29%. what a whopping difference in investor ability to call things right. you can clearly see the s&p 500 fund investors as a group got it wrong very badly .
that is unskilled investors bailing out of 401k's at the wrong time as opposed to the more savy group that tended to own the total market funds.
clearly as a group vanguards total market fund investors are not in the buy and hold camp and seem to be quite good at doing what they do compared to their less savy cousins in the s&p 500 funds..
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