High fee fund question?

I have an roth ira fund, with a fairly high fee of over 2
percent, which I have always been leaning to transfer to my low fee roth
ira with vanguard.
The problem is, this fund always seems to out perform my vanguard
funds at year end.
With this the case, is there a right time or a wrong time to
tranfer this fund because of its obvious high fee rate? Should I wait till a
year, when it underperforms my vanguard fund?

Thanks

Re: High fee fund question?

"J.Lef" <> wrote
> I have an roth ira fund, with a fairly high fee
of over 2
> percent, which I have always been leaning to transfer to
my low fee roth
> ira with vanguard.
> The problem is, this fund always seems to out
perform my vanguard
> funds at year end.
> With this the case, is there a right time or a
wrong time to
> tranfer this fund because of its obvious high fee rate?

Doesn't the answer depend on how much faith you have that it
will continue to outperform Vanguard choices?

If you are simply operating on faith, it's a gamble.

How long is the period that this high fee fund has
outperformed the Vanguard funds you're considering in its
place?

That may sway you.

> Should I wait till a
> year, when it underperforms my vanguard fund?

For the long haul, consider (1) index funds; (2) allocated
per your risk tolerance.

has
resources that discuss why index funds are desirable.

As always, consider asking your question also at
misc.invest.financial-plan , a moderated group.

Re: High fee fund question?

J.Lef wrote:
> I have an roth ira fund, with a fairly high fee of over 2 percent,
> which I have always been leaning to transfer to my low fee roth
> ira with vanguard.

> The problem is, this fund always seems to out perform my vanguard
> funds at year end.

How many decades in a row so far? Lucky streaks over shorter periods
happen a lot, with Janus funds in the late 1990s being some examples.

What's that 2% fund, and what are your Vanguard funds?

Re: High fee fund question?

"J.Lef" <> wrote in message
news:3Gskf.2334$
> I have an roth ira fund, with a fairly high fee of over 2
> percent, which I have always been leaning to transfer to my low fee roth
> ira with vanguard.
> The problem is, this fund always seems to out perform my vanguard
> funds at year end.
> With this the case, is there a right time or a wrong time to
> tranfer this fund because of its obvious high fee rate? Should I wait till
> a year, when it underperforms my vanguard fund?

I just had a big win at the racetrack, where my $2 suddenly turned into $20,
so next year I am going to get rid of those boring mutual funds and put it
all on horses.

Re: High fee fund question?

On Sun, 04 Dec 2005 02:39:59 GMT, J.Lef <> wrote:
> I have an roth ira fund, with a fairly high fee of over 2
> percent, which I have always been leaning to transfer to my low fee roth
> ira with vanguard.
> The problem is, this fund always seems to out perform my vanguard
> funds at year end.
> With this the case, is there a right time or a wrong time to
> tranfer this fund because of its obvious high fee rate? Should I wait till a
> year, when it underperforms my vanguard fund?

Maybe never. Consider the following 2 funds in my 401k

Large Cap Stock Index average returns after 0.31% expense:
5.87% YTD, 1yr 8.09, 3yr 11.70, 5yr 0.25, 10yr 8.87

Int'l Small Co. average returns after 1.46% expense:
22.90 YTD, 1yr 26.54, 3yr 32.91, 5yr 11.06, 10yr 17.25

Which one would you put more of your money in long term?
PS: I am also diversified in other funds, but these are the worst and best
that I am in. We do not have any energy specific funds.

Re: High fee fund question?

J.Lef wrote:
> I have an roth ira fund, with a fairly high fee of over 2
> percent, which I have always been leaning to transfer to my low fee roth
> ira with vanguard.
> The problem is, this fund always seems to out perform my vanguard
> funds at year end.
> With this the case, is there a right time or a wrong time to
> tranfer this fund because of its obvious high fee rate? Should I wait till a
> year, when it underperforms my vanguard fund?

Since contributions made post-tax on tax free growth do not require
taxes be paid again on money taxed post-growth when growth is
proportionally less, the net effect is that more is contributed in
pre-tax dollars to a Roth IRA than to a traditional IRA. Than along
comes a fund, like any other one, swinging a 2% redemption fee. 2%
cake funds, and they look good enough to eat them, too. I think of it
as the premium premium no-loaders exact. They're the top of the
charts, and they know it. That's the biz. There's funds and then
there's funds - they go up and down, and around and around. Either
they are, and are darlings, or they aren't, in which case they're damn
liars - there's no underperforming. I pay a fund 2% because I find
assurance in their results they provide me by dint of research I
substantiate through holdings. If not, then it's my mistake and I need
to rebalance. No point in dragging an IRA in by the tail, because of a
disparity over given choice.

Re: High fee fund question?

There is no right or wrong time, no. Just do it. But if it is
outperforming the VG funds, why? Really depends on WHICH VG funds and
WHICH other fund. No real answer here, no one really knows what the
future will bring. My Vanguard funds have done very well. Low fees and
no BS fund company. No talking me out of withdrawing or runarounds.
They just do what I click.

Re: High fee fund question?

"Doug" <> wrote

> My Vanguard funds have done very well. Low fees and
> no BS fund company.

Wow, do I disagree with you. I think Vanguard is *the* BS fund company.

Re: High fee fund question?

I like Vanguard because it has funds with low fees, it has no
"ownership" by a group of stock holders that demand profits, it's
managers do NOT make millions of dollars in unreasonable salaries. They
sailed through the mutual fund scandals with a clean bill of health.
Vanguard has been doing things to discourage short term trading for
years. They don't try and hold onto your money when you want to
withdraw it. They don't advise, they just do what you tell them to. I
am sure they aren't perfect, but they are about the best there is out
there for being an advocate for the small investor. They do their job
ethically and efficiently.

Re: High fee fund question?

"Doug" <> wrote

>I like Vanguard because it has funds with low fees, it has no
> "ownership" by a group of stock holders that demand profits, it's
> managers do NOT make millions of dollars in unreasonable salaries.

How much do they make? You might be surprised.

>They
> sailed through the mutual fund scandals with a clean bill of health.

That is not true. They were allowing their 'flagship' clients late trades if
the call was taken at or before 4:PM. Even if the call wasn't answered until
after 4:PM. This service was not available to you and me and it is no longer
available to the flagship client either.

> Vanguard has been doing things to discourage short term trading for
> years. They don't try and hold onto your money when you want to
> withdraw it. They don't advise, they just do what you tell them to. I
> am sure they aren't perfect, but they are about the best there is out
> there for being an advocate for the small investor. They do their job
> ethically and efficiently.

If they were such champions of the small investor please explain why:
1. their most successful funds require $25,000 minimum.
2. they just raised the amount to open an IRA from $1,000 to $3,000 for most
funds.
3. they have a sales/redemption fee on their Emerging Market fund.
4. if you sell shares in a fund you can't buy back in for 90 days.
5. if you set up an account with them and re-balance, as they suggest, in
December you will be chared ERF's if the shares you sell are under the
required hold period.

Re: High fee fund question?

Well if you don't like Vanguard, who do you think is better?

Re: High fee fund question?

"Doug" <> wrote
> Well if you don't like Vanguard, who do you think is better?

Here's a list of who I think is better:

Start with this page and then change the 'A' in your browser address box to
'B' and so on until you get to 'Z'. Or, you can use this link:
and just click on the
letter of your choice.

You didn't respond to any of my questions. This implys that you are in
agreement with me.

Re: High fee fund question?

> "Doug" <> wrote

>> Vanguard has been doing things to discourage short term trading for
>> years.

Why do you care about this?

Re: High fee fund question?

>Why do you care about this?

Short term trading means high volume trading. It costs the fund money
to redeem shares and then buy them, which is passed along to the
investors in the fund. Fund management fees don't include trading
costs. Trading costs reduce the returns of the fund.

Re: High fee fund question?

Your links are nonsense. The first is several funds all starting with
A. The next link is a link of stocks traded on the Nasdaq. If you are
implying that ALL funds are better than Vanguard, clearly that is
nonsense, since that list would include all sorts of funds known to
charge high fees and funds that were indicted for malfeasance in the
recent mutual fund scandal.

Basically discount anything this "Ed" is posting. It is nonsense.

Re: High fee fund question?

"Doug" <> wrote

> >Why do you care about this?
>
> Short term trading means high volume trading. It costs the fund money
> to redeem shares and then buy them, which is passed along to the
> investors in the fund. Fund management fees don't include trading
> costs. Trading costs reduce the returns of the fund.

The penalties imposed on short term traders, people with small balances,
etc. should easily cover those costs. Trading costs are included in the
total annual operating expenses along with management fees.

Re: High fee fund question?

Ed wrote:

> "Doug" <> wrote
> > Well if you don't like Vanguard, who do you think is better?
>
> Here's a list of who I think is better:
>
> Start with this page and then change the 'A' in your browser address box to
> 'B' and so on until you get to 'Z'. Or, you can use this link:
> and just click on the
> letter of your choice.

Could you be less specific?

Re: High fee fund question?

"Doug" <> wrote

> Your links are nonsense. The first is several funds all starting with
> A. The next link is a link of stocks traded on the Nasdaq. If you are
> implying that ALL funds are better than Vanguard, clearly that is
> nonsense, since that list would include all sorts of funds known to
> charge high fees and funds that were indicted for malfeasance in the
> recent mutual fund scandal.
>
> Basically discount anything this "Ed" is posting. It is nonsense.

Of course Vanguard isn't the worst of them, but I really don't like them,
not even a little.
You still haven't responded to any of my questions. Perhaps you are
embarrassed to find out that all that crap you said about Vanguard was
false?