Author Topic: Comparison Tools that account for Front Load & Expenses?  (Read 2484 times)

hadabeardonce

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Comparison Tools that account for Front Load & Expenses?
« on: April 14, 2016, 12:12:18 PM »
I'm trying to compare my American Funds 403b account to Vanguard. Most sites recommend using the Morning Star 10 year chart to compare funds, but it doesn't look like they account for the front load and expenses.

The American Funds fees are really alarming to me:

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$ 2,500.00 Initial Investment (04/09/2007)
$19,200.00 Additions
$ 5,268.03 Withdrawls and Fees
$     0.00 Exchanges
$ 7,159.13 Gains/Declines
$23,591.10 Ending Portfolio Balance (04/14/2016)

AMCAP, ANCFX, AGTHX, AIVSX, SMCWX all have a front load of 5.75. AIBAX is 2.5. The expenses range from .58 to 1.07.

Is there a way to roughly compare how this money would have fared over the same period of time if it would have been in something like VTSMX? It really feels like I'm just treading water when fund managers charge so much right off the bat.

Thanks,

MDM

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Re: Comparison Tools that account for Front Load & Expenses?
« Reply #1 on: April 14, 2016, 11:57:14 PM »
Morningstar's "growth of $10K" charts do account for expenses and dividend reinvestment, but not loads.  Fortunately you can multiply the final value by (1 - load) to get the correct answer.

See http://www.morningstar.com/InvGlossary/growth_of_10000_definition_what_is.aspx and https://www.bogleheads.org/wiki/How_to_use_Morningstar_growth_charts.

hadabeardonce

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Re: Comparison Tools that account for Front Load & Expenses?
« Reply #2 on: April 15, 2016, 11:04:03 AM »
Morningstar's "growth of $10K" charts do account for expenses and dividend reinvestment, but not loads.  Fortunately you can multiply the final value by (1 - load) to get the correct answer.

See http://www.morningstar.com/InvGlossary/growth_of_10000_definition_what_is.aspx and https://www.bogleheads.org/wiki/How_to_use_Morningstar_growth_charts.



^ That's what I came up with. Do the charts include 12b-1 fees too?

I've been trying to compare the funds my financial advisor recommends versus the Vanguard index fund method recommended on this site.

Thanks for the advice!

MDM

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Re: Comparison Tools that account for Front Load & Expenses?
« Reply #3 on: April 15, 2016, 11:33:17 AM »
^ That's what I came up with. Do the charts include 12b-1 fees too?

I've been trying to compare the funds my financial advisor recommends versus the Vanguard index fund method recommended on this site.

Thanks for the advice!
Spreadsheet appears correct - didn't look closely.

Short answer: yes.  See http://www.morningstar.com/InvGlossary/expense_ratio.aspx for more details, but briefly:
Quote
The expense ratio is the annual fee that all funds or ETFs charge their shareholders. It expresses the percentage of assets deducted each fiscal year for fund expenses, including 12b-1 fees, management fees, administrative fees, operating costs, and all other asset-based costs incurred by the fund.

See https://www.bogleheads.org/wiki/SPIVA_scorecards for one comparison of index vs. actively managed funds.