Author Topic: Convenient math and cherry picking at American Funds  (Read 2126 times)

Bumperpuff

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Convenient math and cherry picking at American Funds
« on: May 30, 2017, 12:59:30 PM »
I saw this add pop up on facebook and thought I'd share: 

https://www.americanfunds.com/individual/insights/investment-insights/five-american-funds-that-beat-the-first-index-funds-lifetime-results.html?k_clickid=502b23e4-add9-4f38-8e90-a7794f4777cc&cid=ps_ggl_73041



So, if i'm reading this correctly, their cherry picked funds have under-performed VFINX over the past ten years once you account for the front load and fees. I'm not sure how this is helping their cause.

jinga nation

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Re: Convenient math and cherry picking at American Funds
« Reply #1 on: May 30, 2017, 01:27:54 PM »
That's an ad for VFINX. ER=0.16 and 3% turnover.
Unless the suckers be looking at 1 year returns only, before front-load fees and commissions.

secondcor521

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Re: Convenient math and cherry picking at American Funds
« Reply #2 on: May 30, 2017, 05:23:49 PM »
From the ad:  "†The Vanguard 500 Index Fund has no up-front sales charge"

Yeah.  And no back end sales charge.  And no annual sales charge.  And better tax efficiency.

Oh, and once you have over $10K (which shouldn't take that long for an average Mustachian to accumulate), Vanguard will *automatically* convert those shares tax-free and sales-charge-free to VFIAX.  With an ER of 0.04%.

Travis

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Re: Convenient math and cherry picking at American Funds
« Reply #3 on: May 30, 2017, 07:05:30 PM »
American Funds likes to selectively advertise funds that had one good year and imply their entire portfolio does just as well (not mentioning ER and front-loaded fees of course). I'm sure other companies do the same, but I seem to see more of their advertising than other companies.