The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: talltexan on May 02, 2017, 11:09:22 AM
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https://www.forbes.com/sites/michaelfoster/2017/03/21/14-funds-that-crush-vanguard-and-yield-up-to-11-9/?utm_source=yahoo&utm_medium=partner&utm_campaign=yahootix&partner=yahootix&yptr=yahoo#63529157282a
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1 year and 3 year comparisons aren't terribly valuable to most people around here I would assume.
That is a very short timeframe to look at for performance.
The article mentions it's biggest weakness towards the end:
"What about longer timeframes?
Here’s the rub: many CEFs are too new for us to make the comparison."
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Edit: looks like Portfoliovisualizer has the wrong data for DNP. Maybe it's not total return?
Stockcharts looks right.
Over 7 years
VTSAX +125%
DNP +103%
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Heathen! Burn him!
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Heathen! Burn him!
hee hee!
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Of course he picked the winning funds before they outperformed the index funds, right? And he is going to tell us which funds will outperform the index for 2018, right?
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The author seems pretty clear that these same funds will continue to outperform the Vanguard ones. Every year. Forever.
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Did the writer even look at the chart he listed? The paragraph right after the table said this:
Vanguard’s funds never win.
Not only do they never win, but they’re almost never in the top spot for any of these three metrics. We do see VSMAX, VIMAX, VDADX and VLCAX beating out the CEF alternatives over a three-year time period—but one can ignore this entirely and just buy the DNP Select Income Fund (DNP), whose 11.01% total return over the last three years beats VSMAX, VIMAX, VDADX and VLCAX.
Um... Within the chart there were four Vanguard funds that had higher 3 year returns over their peer group. And several who had high one year returns with 3 year returns of less than 3% and 2 which were negative! Also, what would the results be if he compared the Vanguard Admiral shares rather than the investor shares?
As for the DNP suggestion. 1.86% Total ER, 1.04% adjusted ER, 26.11% Leverage. While you could get steady, consistent returns from the investments held by DNP the ER and overpaying for the NAV makes Vanguard Index funds look better.
eta: glad to read the comments and all of them being very critical of the writer and his conclusions!