tag:blogger.com,1999:blog-7334408760351487944.post7874785072269924951..comments2023-11-12T06:43:00.060-05:00Comments on Notes on Social Security Reform: AARP mutual fund costsAndrew G. Biggshttp://www.blogger.com/profile/16617460431856611873noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-7334408760351487944.post-7196212845394620002009-05-07T00:45:00.000-04:002009-05-07T00:45:00.000-04:00aion china, aion china gold,
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I'll help...5 stars across the board...ask the folks that paid 26 dollars per year less in expenses for the vangard competitor fund and see if they would have preferred to be in the AARP funds instead of the vangard one over the past 3 years?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-34395459443588293772008-12-12T13:47:00.000-05:002008-12-12T13:47:00.000-05:00Sorry....I'm "with" anon. little slip there with ...Sorry....I'm "with" anon. little slip there with the mind.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-6078143970625132822008-12-12T13:46:00.000-05:002008-12-12T13:46:00.000-05:00I'm wife anon - no two funds are managed exactly t...I'm wife anon - no two funds are managed exactly the same andrew. I dare you to find funds that are managed identical...they don't exist. Some rebalance monthly, some bi monthly, some decide not to depending on the market - some have small bets(becuase they are allowed to) in different investments to try and raise their returns. Some could go totally defensive and go all cash. The point, I suspect, that anon is trying to make is that no two funds are the same and the returns are at least a point of comparison to use when comparing funds...fees are baked into those returns.<BR/><BR/>Just one man's opinion.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-78028200240482318412008-12-10T14:12:00.000-05:002008-12-10T14:12:00.000-05:00Your wrong and your missing my point --- on a 10,...Your wrong and your missing my point --- on a 10,000 investment the difference between the 2 funds YOU mention is 26 bucks. <BR/><BR/>My point is that your comparing expenses between 2 funds and I'm saying that if your going to do that then compare the returns of the funds as well - don't take your analysis half way. Compare expenses and then compare performance of the funds your are mentioning. But as i suspect you are missing my point.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-34687479150085692032008-12-10T13:23:00.000-05:002008-12-10T13:23:00.000-05:00Comparing this year's returns is silly, since the ...Comparing this year's returns is silly, since the returns are purely a function of the asset allocation. In other words, let's say I found a Vanguard fund with exactly the same asset allocation as AARP's. In that case, the net return would have been 0.26% higher this year and every year. The point of my post was to find roughly comparable funds and then compare the fees. Moreover, returns in any given year aren't very significant since they're one draw out of many. If all you care about is returns, then the average return on Vanguard's fund is surely higher than AARP's since it's more stock heavy. But again, that wasn't the point. But since I suspect you're missing the point I made, I think I'll call it a day here.Andrew G. Biggshttps://www.blogger.com/profile/16617460431856611873noreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-36289084689715521402008-12-10T13:15:00.000-05:002008-12-10T13:15:00.000-05:00One other thing to think about...is there has been...One other thing to think about...is there has been a significant amount of articles recently about how "Conservative" fund or funds in general identifying themselves as something and truly not being the case...as in the Vanguard Conservative Fund - it has a much higher equity exposure than some of it competitors so - it has suffered tremondously more (return vs. AARP Conservative Fund) than most "Conservative" investors should have. This is the same cateogry that the majority of AARP members should be in...conservative...i doubt you would find many that suggest a loss of -25% through december is conservative..Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-29582501624698882322008-12-10T13:09:00.000-05:002008-12-10T13:09:00.000-05:00I gave you the returns for the AARP Conservative F...I gave you the returns for the AARP Conservative Fund and it's competitor in the Vanguard world...it's conservative Fund of Fund. It's apples to apples. <BR/><BR/>Explain to me how you think that additional .25% of fees is incrementally that much more detrimental than a return of -24.75 verse -11.81 during the same time period. I'll make it easier....Which fund would you have rather been in during the past 11 months? -Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-16160842956388611532008-12-10T12:38:00.000-05:002008-12-10T12:38:00.000-05:00Anon: You may be right that Vanguard's conservativ...Anon: You may be right that Vanguard's conservative growth fund matches AARP's aggressive stock fund more closely in its asset allocation. But in the context of index funds, which both AARP's fund and the Vanguard funds are composed of, fees matter much more because there's very little in the way of active management. Can AARP or Vanguard alter the composition of the mutual fund? Sure. But are they likely to? Not very. In which case, fees matter a lot.Andrew G. Biggshttps://www.blogger.com/profile/16617460431856611873noreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-68993667497040856692008-12-10T12:09:00.000-05:002008-12-10T12:09:00.000-05:00the ticker for the comparative vanguard i quoted a...the ticker for the comparative vanguard i quoted above is vscgx - morningstar and others put this fund in the same "category" as the aarp conservative fund.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-71911922419167190892008-12-10T11:41:00.000-05:002008-12-10T11:41:00.000-05:00No offense but your wrong. Again, it has to do wi...No offense but your wrong. Again, it has to do with performance not fees. <BR/><BR/>Vanguard Fund of Fund Lifestyle is down -24.75 year to date through December 1st. The AARP Conservative Fund is down -11.81 during the same time period. They both claim to have 75/25 in equity verse bonds...but both have the ability to "change" allocation upon their judgement. Again, i reinformce fees are completely overrated...tell me what you've made for me...again...I'll pay 200 basis points if you outperform by 300.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-65655412423588219782008-12-09T14:52:00.000-05:002008-12-09T14:52:00.000-05:00The point of searching out comparable funds was to...The point of searching out comparable funds was to do exactly what you suggest. The Vanguard Fund I linked to is also a fund of funds, made up of several of their index funds. It's also auto-balanced. In terms of fund allocation, it's very close to AARP's and would have similar performance. The only difference I can see is the minimum investment and the fees. If you're in a position to make a $3,000 investment with Vanguard, which I expect most AARP members could (they're older and better off than average) then the Vanguard fund seems an unequivocally better deal.Andrew G. Biggshttps://www.blogger.com/profile/16617460431856611873noreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-58547869303440412802008-12-09T14:41:00.000-05:002008-12-09T14:41:00.000-05:00How about the fact that to do a true comparison be...How about the fact that to do a true comparison between fund families you have to keep them the "same". AARP's funds now are Fund of Funds with a total cost of .50 basis points. Compare that to other Fund of Funds and you'll get a much higher cost across the board than .50 basis points all in. <BR/><BR/>You also forget to mention that it includes auto rebalancing - no small account fee - which most big shops have as well as salaried professional advisors - who don't work on commission. Lastly, check out performance more than expenses...because over time performance and return on your money is more important than expenses...i'll gladly pay more if you'll pay me back more than the other folks "supposedly" charging less. <BR/><BR/>Please don't argue with me about funds as I have worked in the fund industry for more than 20 years at many different fund shops.<BR/><BR/>Tell the whole story...<BR/>By the way...do the research a great many - millions of our seniors are not in a position to invest thousands of dollars..Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-84388078104944707692008-12-04T19:09:00.000-05:002008-12-04T19:09:00.000-05:00Anon: For some reason, I don't find your comment p...Anon: For some reason, I don't find your comment particularly persuasive. <BR/><BR/>But if you want more insight, how about this: AARP charges an average of 50 basis points administrative charge for their mutual funds, which (apparently) many people willingly pay. The average administrative charge for mutual funds is even higher than that; I believe it's around 150 basis point. It's a little hard to argue that a 30 basis point admin charge for a personal account is excessive when millions of investors happily pay multiples of that for mutual funds. If 30 basis points is too much, what would be the right compensation for the service provided?Andrew G. Biggshttps://www.blogger.com/profile/16617460431856611873noreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-10429428574206314882008-12-04T18:17:00.000-05:002008-12-04T18:17:00.000-05:00Why does being a hypocrite mean you are wrong? may...Why does being a hypocrite mean you are wrong? maybe because they are greedy bastards they realize just how greedy the bastards who run your private accounts will be.<BR/><BR/>More insight, less hackery, pleaseAnonymousnoreply@blogger.com