Higher Yield and higher Exp.Rat. vs Vanguard funds

[FerrumB5]

Would you choose a higher yield fund, that runs 2-4% better than market on average in long run, but comes with 0.95% ER, or a Vanguard family fund that goes with market but has 0.0X% ER? The net gain of first fund is 1-3% or better higher after ER has been subtracted. Fund is PABGX vs let's say VIMAX or VTSAX.

Thanks!

[tj]

Would you choose a higher yield fund, that runs 2-4% better than market on average in long run, but comes with 0.95% ER, or a Vanguard family fund that goes with market but has 0.0X% ER? The net gain of first fund is 1-3% or better higher after ER has been subtracted. Fund is PABGX vs let's say VIMAX or VTSAX.

Thanks!

If you can guarantee that it will always outperform then sure. There would be no way to know that without a time machine.

[Shane]

Looks like a really solid fund. It would be nice if you could only pay the higher expense ratio in years when the fund out performed the index. The problem is, they keep charging you that .98% ER even in years when they under perform the market, and then it sucks...

[mrpercentage]

T Rowe. I like T Rowe and Im pretty loud about it. On active funds I like 3 qualities T Rowe usually sticks to.
1. No sales load
2. Out performs
3. Expense under 1%

T Rowe is also very open about who is managing your money. They dont have to out perform all of the time. They just need to out perform most of the time. I like some of American Funds too but I can not defend the disgusting sales load some of their funds have. I suspect in order to preserve assets under management most will ditch the sales load or face the Darwin award. Vanguard has done a great job keeping the market competitive

[FerrumB5]

Thanks for your input! So, looks OK more or less? And I can keep it as 50% of my 401k.
The second half is currently 100% VIMAX - may be I'll reshuffle only this part a bit - add VFIAX to it.

[Scandium]

Would you choose a higher yield fund, that runs 2-4% better than market on average in long run

It has, or it will?
Big difference

[FerrumB5]

Just like any other non-market fund. Investments come with risks.

[MustacheAndaHalf]

Over the past 10 years, large growth stocks have outperformed large value stocks.  I think that explains the better performance of Blue Chip Growth more than anything else:
Blue Chip Growth, 77% large/growth, +9.7% annualized for 10 years (expense ratio: 0.98%)
Vanguard Growth, 51% large/growth, +8.7% annualized for 10 years (expense ratio: 0.09%)
Vanguard S&P 500, 29% large/growth, +7.5% annualized for 10 years (expense ratio: 0.05%)

The SEC requires "a fund's past performance does not necessarily predict future results" to appear in a fund prospectus.  If you expect +1.00% more performance while paying +0.89% more annual fees, you might be taking the SEC warning too lightly.