My advisor says he's beaten the S&P 500 returns for 12 years and sends me charts showing exactly that. So I went to morningstar.com and compared the same funds I have with advisor to VTSAX and VFIAX over the same time period. All funds start with a hypothetical $10,000 investment and (as I understand it) show actual past returns. The results show the ending value of accounts as this;
VTSAX:$24,510.61
VFIAX:$24,234.35
:GFACX:$21,519.25
GFAFX:$23,528.67
The other thing I noticed (I'm pretty sure, but not certain), is that expense ratios and loads are not accounted for in the results. The beginning value on all 4 funds shows $10,000.
But GFACX has an expense ratio of 1.46% and back end load of 1%. And GFAFX has an expense ratio of .71%, no front or back end load.
Obviously if the expenses are factored in the results are really lopsided towards Vanguard.
I'm missing something here, or either advisor or Morningstar does not have accurate information.
Are the expenses on the American Funds already in there somewhere?
Would the fact that I didn't start with a hypothetical $10,000 investment (like the simulation), but instead regularly invested small amounts of money, have some magical ability to make the American funds outperform index funds, like advisor claims? Lol.
Please let me know what you think, thanks.