Author Topic: GAM ?  (Read 2745 times)

soccerluvof4

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GAM ?
« on: March 13, 2014, 08:34:15 AM »
Does anyone have any opinions, thoughts etc... regarding the claims below and is anyone in the fund. Being newer to the index funds I just came across this article and I know alot of people have alot of knowledge on funds, links etc... to check stuff like this out. ( I have been allocating my money to 4 Vanguard funds). As i said was just curious what the longer time Index fund users feel.


 General American Investors (GAM), which has operated since 1927. General American's 2013 annual report showed some stunning results In fact, over the most recent one-, five-, 20-, 30-, 40- and 50-year periods, shareholder returns outperformed the S&P 500, with dividends reinvested. The fund has generated 11.9% compounded over 50 years of bull, bear and dull markets, and that can go a long way toward dream achievement.

After the initial purchase, you'll own some of world's best companies without having to lift a finger. The indicated returns are net of all fees but before taxes.

KingCoin

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Re: GAM ?
« Reply #1 on: March 13, 2014, 09:08:56 AM »
It's under-performed that S&P500 by 0.40% annually for the last 10 years (though done much better over the last 15 years). Maybe they've lost the magic. Not sure how management has turned over.

Fees at 1.27% are on the high side, but discount to NAV is a juicy 14.5%. Surprising for a fund with a supposedly stellar performance.

Buying funds based on past performance is always a dubious proposition at best. When in doubt, you're probably better off sticking with a low cost index.
« Last Edit: March 13, 2014, 09:10:39 AM by KingCoin »

soccerluvof4

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Re: GAM ?
« Reply #2 on: March 13, 2014, 09:25:14 AM »
It's under-performed that S&P500 by 0.40% annually for the last 10 years (though done much better over the last 15 years). Maybe they've lost the magic. Not sure how management has turned over.

Fees at 1.27% are on the high side, but discount to NAV is a juicy 14.5%. Surprising for a fund with a supposedly stellar performance.

Buying funds based on past performance is always a dubious proposition at best. When in doubt, you're probably better off sticking with a low cost index.

Thanks!

kyleaaa

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Re: GAM ?
« Reply #3 on: March 13, 2014, 12:48:36 PM »
GAM is a closed-end fund that uses leverage and invests in a variety of assets, not just large-cap US stocks. S&P 500 isn't a reasonable benchmark.

soccerluvof4

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Re: GAM ?
« Reply #4 on: March 13, 2014, 01:02:09 PM »
GAM is a closed-end fund that uses leverage and invests in a variety of assets, not just large-cap US stocks. S&P 500 isn't a reasonable benchmark.

If that's true do you have anymore to add like are you in the fund? do you know if the management team has had alot of turnover etc..?

foobar

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Re: GAM ?
« Reply #5 on: March 13, 2014, 01:57:08 PM »
You can find dozens of funds that outperform the S&P over 15 year periods. The kicker is that the ones the outperform it over the next 10 years is likely to be a whole different set of funds.

Closed end funds are interesting. Most trade at a discount and that adds another element of risk to investing. If the discount goes to 30% and you need to sell (it happened to a bunch of funds in the 70s), your unhappy. If it closes from 15% to 5%, you made some easy money. You might think it should trend to 0 but they rarely do that. The other thing to remember is that expense ratios are not just management fees. They also include interest costs for the funds that use leverage. The with a 1.5% fee and 50% leverage is a lot different (riskier, should have higher return at the cost of a lot of volatility) than a fund with 1.5% expense and 0% leverage.


It's under-performed that S&P500 by 0.40% annually for the last 10 years (though done much better over the last 15 years). Maybe they've lost the magic. Not sure how management has turned over.

Fees at 1.27% are on the high side, but discount to NAV is a juicy 14.5%. Surprising for a fund with a supposedly stellar performance.

Buying funds based on past performance is always a dubious proposition at best. When in doubt, you're probably better off sticking with a low cost index.

KingCoin

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Re: GAM ?
« Reply #6 on: March 13, 2014, 02:04:54 PM »
GAM is a closed-end fund that uses leverage and invests in a variety of assets, not just large-cap US stocks. S&P 500 isn't a reasonable benchmark.

It uses modest leverage (14%) and is 86% large cap stocks. S&P500 may not be perfect, but it's the benchmark GAM uses in their annual report.

The discount to NAV has been holding pretty steady at these levels for the last 5 years, so I wouldn't count on that collapsing anytime soon.
« Last Edit: March 13, 2014, 02:06:49 PM by KingCoin »