Author Topic: Low Cost Mutual Funds  (Read 1676 times)

frugal_c

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Low Cost Mutual Funds
« on: October 24, 2016, 08:55:39 PM »
I would like to consider having at least some of my funds actively managed.   I have held off doing so as I always felt that the management fees were too high.  However, I came across a post about Vanguard Wellington which has .26% MER and I am reconsidering.  I am just curious if there is anything other than wellington with such low fees?

NoStacheOhio

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Re: Low Cost Mutual Funds
« Reply #1 on: October 25, 2016, 10:23:07 AM »
Cotnrafund is higher than Wellington, but still within the realm of "not insane."

More to the point, why do you want this?

frugal_c

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Re: Low Cost Mutual Funds
« Reply #2 on: October 25, 2016, 06:56:46 PM »
Cotnrafund is higher than Wellington, but still within the realm of "not insane."

More to the point, why do you want this?

At a low enough expense ratio, I would prefer active management.  There have been times where you can get huge bubbles within indexes while other stocks remain more reasonable.  This seems to be what happened in 1999.  I think a value fund could avoid these situations.   Worst case they should more or less track the index over the long term.  I think the only reason they wouldn't is high fees.  If I can get a fund with low fees it seems I can have best of both worlds.   It is still a bit of a guessing game but I am just more comfortable with them.

FINate

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Re: Low Cost Mutual Funds
« Reply #3 on: October 25, 2016, 07:11:00 PM »
Cotnrafund is higher than Wellington, but still within the realm of "not insane."

More to the point, why do you want this?

At a low enough expense ratio, I would prefer active management.  There have been times where you can get huge bubbles within indexes while other stocks remain more reasonable.  This seems to be what happened in 1999.  I think a value fund could avoid these situations.   Worst case they should more or less track the index over the long term.  I think the only reason they wouldn't is high fees.  If I can get a fund with low fees it seems I can have best of both worlds.   It is still a bit of a guessing game but I am just more comfortable with them.

How did value funds perform relative to the index in the last downturn? The table at https://www.fidelity.com/learning-center/trading-investing/trading/value-investing-vs-growth-investing shows very little difference in 2008 and previous recessions.

frugal_c

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Re: Low Cost Mutual Funds
« Reply #4 on: October 25, 2016, 07:40:36 PM »
Well I certainly won't claim they will always outperform.  2008/09 saw very broad based selling.  In that case there is not much you can do other than be in bonds.  However, in 1999 most value funds did quite well as the stocks they were holding hadn't risen to bubble values.

Look, I really don't want to turn this into a debate over whether active/passive is better.  Clearly all the studies show that passive is better due to low fees.   I am just saying there are cases where active will win and if fees are low enough they will generally keep up with passive.

I simply wasn't aware that there was anything like a .26% fund so am trying to see what other options exist.

human

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Re: Low Cost Mutual Funds
« Reply #5 on: October 25, 2016, 08:10:53 PM »
Edit: duh I just recommended td eseries funds. They are index funds so scratch that sorry falling asleep while posting.
« Last Edit: October 25, 2016, 08:17:15 PM by human »