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You can do that here, and analyze overall fees in various funds. I think many will be surprised that although many funds have some kind of a sales load the fees charged by "no load funds" end up being MORE in the long run than paying a sales load. NO ONE gets these for free.
Loaded funds have almost None to low MER fees.
Non loaded funds have a high MER.
Loaded funds have almost None to low MER fees.
Non loaded funds have a high MER.
LOL...uh, wrong. As I've said twice now, load funds ON AVERAGE have higher ERs than no-load funds. Since you obviously don't believe ME, here's a little snippet from the 2009 Investment Company Factbook (http://www.icifactbook.org/fb_sec5.html): (broken link)
"Funds sold through intermediaries tend to have higher expense ratios than other funds (no-load funds). No-load funds are sold directly to investors or are sold to investors through financial advisers who charge investors separately for investment advice. Thus, no-load funds tend to have lower expense ratios than other funds with similar investment objectives."
All actively managed mutual funds are run by professional managers. Some are more successful, some less; some are more capable, some less. But unless the fund is an index fund or practices some other very rigorous discipline, it's run by professional managers. To pay a mutual fund load of 5.75% is most likely throwing away that money, and worse yet, the money it would have earned over the duration of one's investment. Essentially, every day you hold it the gap between what you should have earned, and what you actually earned, widens a bit more.
I agree with you about the load. However, a lot of people own American Funds via 401k plans and do not have to pay the load. I would never pay a load but if American is offered in your 401k, I'd jump at most of their funds as long as you are getting the "A" "R4" "R5" or "R6" share classes (with R6 being the lowest expense ratio).
I agree with you about the load. However, a lot of people own American Funds via 401k plans and do not have to pay the load. I would never pay a load but if American is offered in your 401k, I'd jump at most of their funds as long as you are getting the "A" "R4" "R5" or "R6" share classes (with R6 being the lowest expense ratio).
That's why I have my wife's 401k partly in American. While I wouldn't say her options are splendid, some of them are pretty good. I didn't bring this up earlier because I felt the discussion centered more around paying the load, something we neither of us approve of (and something my wife doesn't have to pay).
I put a small amount into a IRA using 2 American Funds (Fundamental Investors-A and Washington Mutual Investors-A) in 1997 when I left a job over 10 years ago. I think I had to pay the load, which was ridiculous (I only buy no-loads but had no choice here). After the load, I had $566 in Fundamental and $624 in Washington Mutual. I reinvested dividends & capital gains and put no extra money in. No taxes since it is a retirement account. As of 9/30/09 (12 years later) I have $1,055.89 in Fundamental and 703.96 in Washington. Obviously, the Washington fund was/is a disaster. As to Fundamental, I think it should have done a lot better--I'll leave it to others to run the numbers. When I have a choice, I invest Vanguard with very low expense ratios and no 12b-1 fees.
LOL...uh, wrong. As I've said twice now, load funds ON AVERAGE have higher ERs than no-load funds. Since you obviously don't believe ME, here's a little snippet from the 2009 Investment Company Factbook (http://www.icifactbook.org/fb_sec5.html): (broken link)
"Funds sold through intermediaries tend to have higher expense ratios than other funds (no-load funds). No-load funds are sold directly to investors or are sold to investors through financial advisers who charge investors separately for investment advice. Thus, no-load funds tend to have lower expense ratios than other funds with similar investment objectives."
There. Is it sinking in at all yet?
You cannot buy AF's without paying a load. AF's are the top 3 MF's along with Vanguard and T. Rowe Price.
I agree with you about the load. However, a lot of people own American Funds via 401k plans and do not have to pay the load. I would never pay a load but if American is offered in your 401k, I'd jump at most of their funds as long as you are getting the "A" "R4" "R5" or "R6" share classes (with R6 being the lowest expense ratio).
I put a small amount into a IRA using 2 American Funds (Fundamental Investors-A and Washington Mutual Investors-A) in 1997 when I left a job over 10 years ago. I think I had to pay the load, which was ridiculous (I only buy no-loads but had no choice here). After the load, I had $566 in Fundamental and $624 in Washington Mutual. I reinvested dividends & capital gains and put no extra money in. No taxes since it is a retirement account. As of 9/30/09 (12 years later) I have $1,055.89 in Fundamental and 703.96 in Washington. Obviously, the Washington fund was/is a disaster. As to Fundamental, I think it should have done a lot better--I'll leave it to others to run the numbers. When I have a choice, I invest Vanguard with very low expense ratios and no 12b-1 fees.
I have the Vanguard STAR.
New World Fund does well with AF's.
To all defending the no-load funds and quoting motley fool and those sources, etc. Have you all noticed that all over their website is no-load fund advertising, or do it yourself investment tools?
Would you have bought GM last year when it was tanking? You did if you were in an index non-managed mutual fund.
Use Morningstar & put funds to the test before you quote the Motley Fool who has clearly sold out. Compare them over a 10-20 year period and factor in the up-front load with the loaded, actively managed funds.
If you are in an IRA till your 59.5 and you have 20 years until that point in your life, you might want to think about the long term. Saving 5% today is not worth losing 20% in 20 years.
Would you have bought GM last year when it was tanking? You did if you were in an index non-managed mutual fund.
You seem to be confused about whether you want to debate no-load funds or index funds. Two different subjects.
Quote:
Use Morningstar & put funds to the test... Compare them over a 10-20 year period and factor in the up-front load with the loaded, actively managed funds.
Yes, do that and you'll find that many no-load funds outperform many load funds.
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AF Fundamental Inv. & Washington Mutual
