Author Topic: Question regarding comparing investment fund data  (Read 1513 times)

HBFIRE

  • Pencil Stache
  • ****
  • Posts: 982
  • Age: 41
  • Location: Huntington Beach, CA
Question regarding comparing investment fund data
« on: January 28, 2018, 01:27:15 PM »
Hi all,

I have some of my SEP investments invested in American Funds.  After looking at the fees, etc I'm likely going to be moving these funds over to my Vanguard account where I invest my after tax holdings.

My money manager is insisting the published returns are AFTER fees (not including load fee, but including the ongoing fee).  Does anyone know if this is true?  I wasn't sure where I could verify his statement.

For example, I'm looking at these published numbers on morningstar for one of their funds, but can't find if these numbers are before or after the yearly fees.  I'm trying to compare performance with various holdings I have with vanguards (i.e. a Target Date fund, and some other funds I hold).

http://performance.morningstar.com/fund/performance-return.action?p=investor_returns_page&t=AMCPX&region=usa&culture=en-US

MDM

  • Walrus Stache
  • *******
  • Posts: 9791
Re: Question regarding comparing investment fund data
« Reply #1 on: January 28, 2018, 01:46:21 PM »
Yes, those historical results include the effect of fees.

The only thing guaranteed for the future is the cost of the fees.

See also Fund Fees Predict Future Success or Failure.

Radagast

  • Handlebar Stache
  • *****
  • Posts: 1592
  • Location: West of the Mountains, East of the Sea
  • One does not simply work into Mordor
Re: Question regarding comparing investment fund data
« Reply #2 on: January 28, 2018, 01:51:35 PM »
The link you provided is "investor returns" so it looks like it includes expenses and load. I expect the "total return" tab next door is before expenses or loads. As it is a large growth stock fund the best comparison is probably the S&P500.

Indexer

  • Handlebar Stache
  • *****
  • Posts: 1437
Re: Question regarding comparing investment fund data
« Reply #3 on: January 28, 2018, 04:20:08 PM »
Those returns are after fees. I wouldn't consider its benchmark to be the S&P 500. AMCAP is a growth fund and growth has outperformed value most of the past 10 years.

I compared it to VIGAX, the Vanguard Growth Index, which is a large cap growth index fund.

American VS Vanugard
1 year: 28.14 VS 32.86 
3 years: 13.28 VS 14.67
5 years: 16.21 VS 16.85
10 years: 10.91 VS 11.62
15 years: 10.70 VS 11.04

A Vanguard low cost index fund wins again.

HBFIRE

  • Pencil Stache
  • ****
  • Posts: 982
  • Age: 41
  • Location: Huntington Beach, CA
Re: Question regarding comparing investment fund data
« Reply #4 on: January 28, 2018, 04:57:42 PM »
Great thanks guys!

Indexer, where do you get this data from?  I’m finding different numbers:

http://performance.morningstar.com/fund/performance-return.action?p=investor_returns_page&t=VIGAX&region=usa&culture=en-US

Indexer

  • Handlebar Stache
  • *****
  • Posts: 1437
Re: Question regarding comparing investment fund data
« Reply #5 on: January 28, 2018, 05:30:04 PM »
Great thanks guys!

Indexer, where do you get this data from?  I’m finding different numbers:

http://performance.morningstar.com/fund/performance-return.action?p=investor_returns_page&t=VIGAX&region=usa&culture=en-US

OH, now I see what you are looking at. I was wondering why the performance page you linked looked so different than the page I'm use to looking at. The "investor" return tab isn't showing you the returns of the fund. It's showing how the average investor in that fund performed, keeping in mind that the average investor was probably buying when the fund was doing well and selling when it was doing poorly. If you want to know how the fund did look at the total return tab. Total returns are net of fees(but not front end loads). I provided links with morningstar's definitions.
http://www.morningstar.com/invglossary/investor-return.aspx
http://www.morningstar.com/invglossary/total-return.aspx

My numbers came from the following link, it's the same page you were on but it's the total return tab instead of the investor return tab. There is a button above the growth of 10,000 chart that says 'compare.' I plugged VIGAX in as the comparison fund. Doing that, you should get the same numbers I posted.

http://performance.morningstar.com/fund/performance-return.action?t=AMCPX&region=usa&culture=en-US


EDIT: I just noticed the investor return chart is dated 12/31/2017 while the trailing total return chart is dated 01/26/2018. That also explains the difference in numbers.
« Last Edit: January 28, 2018, 05:50:42 PM by Indexer »

HBFIRE

  • Pencil Stache
  • ****
  • Posts: 982
  • Age: 41
  • Location: Huntington Beach, CA
Re: Question regarding comparing investment fund data
« Reply #6 on: January 28, 2018, 05:45:45 PM »
Great thanks!  Helps a lot.

Just to confirm, by “net of fees”, you’re saying it includes the yearly fees (likely excludes load fee since this varies). Thanks.

ysette9

  • Walrus Stache
  • *******
  • Posts: 5960
  • Location: Bay Area, CA
    • Insert Snappy Title Here (Journal)
Re: Question regarding comparing investment fund data
« Reply #7 on: January 29, 2018, 01:00:20 PM »
Yes, those historical results include the effect of fees.

The only thing guaranteed for the future is the cost of the fees.

See also Fund Fees Predict Future Success or Failure.

Thanks for sharing that link. That is a good article.