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227
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11/20/09
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Re: Cnadians are paying the highest fees in any developed.......
Posted:
Jan 18, 2007 9:36 AM
in response to: alsamba
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"The paradox to this is if you buy it through an advisor, you will still have to pay that advisor something for their services."
Yep, just like the US.
I am not saying its better or worse this way. I am just saying people don't need to freak on fees vs the US because so much of the media forgets about the extra fee the US advisor charges.
Perhaps the key word in the quote is "services." I assume that people are actually more concerned with value rather than price. They see no added benefit from using an advisor so, naturally, don't want to pay anything for it. If they saw added value from the advisor (and recognized it, I have to add) then they'd squawk less about the fees.
The same goes for the passive/active management debate.
Some/Many(?) advisors do not add value. Discount brokerages provide administrative services only. For that Fidelity fund mentioned, Waterhouse collects a 1% fee from oldnestor for sending him statements and arranging the purchases/redemptions. ...maybe with a sales fee on top of that? Is that enough "value" for the fees?
There is/was a brokerage that charged a flat monthly fee and rebated the trailer fee to the client, anyone remember what that company is called?
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219
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Re: Cnadians are paying the highest fees in any developed.......
Posted:
Jan 18, 2007 12:05 PM
in response to: alsamba
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Are you thinking of these guys:
http://www.asldirect.com/
From what I can see on this forum, most of the regular posters are DIY investors and quite a bit of the traffic is from folks wishing to investigate some DIY strategy or another. The question, then, is: are DIY mutual fund investors in Canada or the US better off?
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45
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Re: Cnadians are paying the highest fees in any developed.......
Posted:
Jan 18, 2007 3:18 PM
in response to: alsamba
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I have a discount broker as well as a full-service broker. I don't see any advantage in terms of fees from one or the other. The full-service broker sells me the same no-load funds as I can buy through the discount broker. I'm not getting any money back from the discount broker. They're offering me no service but still collecting the annual fees from the MF company.
The only difference in fees is when it comes to stock purchases. The discount broker charges less for buying and selling stocks, so I use it for that.
Why do people here bash mutual-fund financial advisors? They don't charge any more than if you use a discount broker, and you get some free advise.
Just don't take the DSC funds if they try to sell you those. They'll still give you the regular funds with a zero load.
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2,536
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Re: Cnadians are paying the highest fees in any developed.......
Posted:
Jan 18, 2007 6:12 PM
in response to: alsamba
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Why do we bash mutual fund managers/advisors?
I think the thing that bothers me most is that when a major correction/bear market happens and your fund tanks, the manager still collects his 2.5% or whatever and takes no responsibility for any underperformance.
Of course this is not true of all funds, but it is very true of some of the ones I've invested in.
Altamira is the company I'm think of. Now, I like their service and they do have some good funds at present, but over the last 10-12 years several funds have suffered major damage while the manager has simply bailed; the Equity Fund, for instance, has changed managers 4 or 5 times in 10 years.
I could go on, but you get the point.
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227
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Re: Cnadians are paying the highest fees in any developed.......
Posted:
Jan 22, 2007 11:00 PM
in response to: alsamba
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"I think the thing that bothers me most is that when a major correction/bear market happens and your fund tanks, the manager still collects his 2.5% or whatever and takes no responsibility for any underperformance."
I think you mean when a fund manager underperforms his market, not when the bear markets happen because the fund manager didn't cause the correction, right? If its any consolation his 2.5% or 3.5% or 1.09% or whatever is smaller because the market tanked.
"...but over the last 10-12 years several funds have suffered major damage while the manager has simply bailed; the Equity Fund, for instance, has changed managers 4 or 5 times in 10 years."
I am not sure about your point with this. Being a manager-groupie, I think you need to seriously considering bailing when a manager does, assuming you liked the manager in the first place. If the fund sucked and the manager bailed then you should be...what...hopeful that the new manager will be better, right?
If a fund sucks "consistently" (and how you define that is a huge issue) then don't be in that fund.
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Posts:
227
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11/20/09
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Re: Cnadians are paying the highest fees in any developed.......
Posted:
Jan 22, 2007 11:06 PM
in response to: alsamba
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"Are you thinking of these guys:
http://www.asldirect.com/
From what I can see on this forum, most of the regular posters are DIY investors and quite a bit of the traffic is from folks wishing to investigate some DIY strategy or another. The question, then, is: are DIY mutual fund investors in Canada or the US better off?"
Skilled and rational investors are better off, I am not sure how many DIYers are skilled and rational. I am not even sure if I am skilled and rational. I DO know that many many investors under-perform their own funds by buying and selling at precisely the wrong times.
It has been my personal experience that the DIYers who come to see me are lousy at DIY investing... of course, the good ones wouldn't see the need to come to see me so....
If you are referring solely to the issues of fees, then they are equally well off, given the structures available. Of course the US has more choice but...hmmmm... is that good or bad.
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66
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Re: Cnadians are paying the highest fees in any developed.......
Posted:
Jan 23, 2007 4:56 AM
in response to: alsamba
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I think you mean when a fund manager underperforms his market, not when the bear markets happen because the fund manager didn't cause the correction, right? If its any consolation his 2.5% or 3.5% or 1.09% or whatever is smaller because the market tanked.
"...but over the last 10-12 years several funds have suffered major damage while the manager has simply bailed; the Equity Fund, for instance, has changed managers 4 or 5 times in 10 years."
I am not sure about your point with this. Being a manager-groupie, I think you need to seriously considering bailing when a manager does, assuming you liked the manager in the first place. If the fund sucked and the manager bailed then you should be...what...hopeful that the new manager will be better, right?
If a fund sucks "consistently" (and how you define that is a huge issue) then don't be in that fund.
So a hypothetical question.... take a look at accumulous tallisman Fund, a fund manager that attempted to out time the market and failed miserably last year.... the fund down 11% while index up 16%, underperformance of 27%,,,
what advice would you have for a fund holder in this case ?? The danger of relying on a manager to time the market is that there is no reliable way of timing.
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Posts:
227
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11/20/09
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Re: Cnadians are paying the highest fees in any developed.......
Posted:
Jan 23, 2007 1:35 PM
in response to: alsamba
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"So a hypothetical question.... take a look at accumulous tallisman Fund, a fund manager that attempted to out time the market and failed miserably last year.... the fund down 11% while index up 16%, underperformance of 27%,,,
what advice would you have for a fund holder in this case ?? The danger of relying on a manager to time the market is that there is no reliable way of timing."
Ok to sidestep the commentary on this particular fund, since I know squat about it, here is the process I use for evaluating a mutual fund. (in order)
1. What is the manager's stated style and discipline? eg. Growth, value, momentum, blended?
2. Does the portfolio look like the stated style?
eg. Holdings-broadly viewed, fewer holdings for a bottom-up, value manager etc.
3. Does the fund perform better than its similar peers. "Better" depends on the fund and its peers. For exmaple, if the managers take a conservative, value approach to investing in small-cap equities I want to see out-performance during down markets, a low down-side capture, lots of cash during boom times, etc. We also use rolling 12 and 36 month comparisons to the median fund and the index to double check.
4. Has the management team been in place at least three years? If not, we will seldom consider the fund as an option.
Also,
The year-to-date, quarterly, and, of course, compound annual returns you see in the papers and on websites is next to useless. It is too simplistic and tells us nothing about living through the fund on a day to day basis.... well maybe as a starting point.
Ongoing:
We do quarterly reviews of portfolios and managers and funds. If they are staying ahead of their peers then we let them cook along. If they are lagging (performance or volatility), then we dig into why, call the management teams to talk to them and sometimes go back to do the basic review again to make sure this is still a good choice.
My key key key concern is manager discipline. As long as they stick to their style, every STYLE will be successful at some point in the cycle. If they resist market (and marketing) pressure and simply know what they know, I will plow money into the periods when they appear to suck badly. This is a brutal process and can sometime take years to correct. But the return then makes all the patience and teeth grinding and discipline and reviewing and trust worth it.
So, if you think market-timing is a good way to invest and this manager states he is a market-timer and has shown himself in the past to consistently have been at timing the market then now that he appears to suck, plop more in. But that is wholly dependent on the above "if". If you don't think market timing can work, then don't invest into it.
This has alot of industry jargon in it. I ain't going to explain it all out because most people don't care that much.
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66
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Re: Cnadians are paying the highest fees in any developed.......
Posted:
Jan 23, 2007 4:44 PM
in response to: alsamba
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So, if you think market-timing is a good way to invest and this manager states he is a market-timer and has shown himself in the past to consistently have been at timing the market then now that he appears to suck, plop more in. But that is wholly dependent on the above "if". If you don't think market timing can work, then don't invest into it.
Do you know any market timers that consistantly, lets say
over 60% of the time, are right ??
There is no such thing in my experience.
Anyway, this Ross HEaly is supposed to be a "value" investor,and proclaims his fund to be a value fund, yet last year, he got into cash, today at 60% cash, anyways,
the terrible results are from his stubborness to admit
that he was wrong on calling a bear market.
The problem is that in the stock market, even today,
on a PE or Pcashflow basis, there are many stocks
that are of value.
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48
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11/20/09
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Re: Cnadians are paying the highest fees in any developed.......
Posted:
Jan 23, 2007 4:59 PM
in response to: alsamba
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Healy may, one day, be vindicated but that might be at the risk of losing many investor clients. For a "value manager", how could he be so off on the market? Surely there has to be some stocks in the universe of 10,000 that have some value. This is what can happen when you bet wrong. Diversity asset allocation will weather the bear. This is what I'm paying my advisor to do.
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