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After watching the most recent Wealthtrack (March 28, 2014), an interview with David Winter, I'm finding myself increasingly concerned with Wintergreen Fund and its management. I'm a day one investor and a former Mutual Discovery holder. I found Mr. Winter's responses to questions to be pat (or simplistic) and often non-responsive in part or full. When asked about his expense ratio, he explained simply that the kind of research they do is expensive (or something to that effect). Fair enough...but wait... his firm generates nearly $30MM in fees per year and only has four investment professionals (and 8 total employees) per Wintergreen's ADV. Doesn't his answer suggest to you that he has teams of people following these investments?
@mman: I watched the most recent Wealthtrack interview last night, as an interested day one investor, having been very happily invested with David Winters in Mutual Beacon. I was pleasantly surprised when Consuelo Mack asked him about the expense ratio, and very disappointed with the answer. If I recall correctly, he said something like 'when you go to the doctor or the money doctor, you don't want to hire the cheapest you can find, but the best you can find.' I thought that lacked humility and even accuracy, considering his 1, 3 and 5 year performance as listed on Morningstar.
He continued by saying that the vast majority of mutual funds are just closet indexers, hewing very closely to an index.......and that he doesn't do that at all; he manages very actively and, and something to the effect of 'this sort of thing is very expensive.'
I scratched my head in wonderment. What on earth is he talking about? I agree with you 100%. If he had a team the size of Dodge & Cox, I could understand it. If he had stock analysts with offices in Asia, Europe, far and wide, scouring the globe for undervalued investments, I could see it. What does he do that costs so much money?
The icing on the cake.....I did not appreciate his next statement at all.......he said something to the effect that he felt that the fact that they offer lower expense Institutional shares made up for the higher expense ratios. First of all, the institutional shares charge a 1.63% expense ratio, still expensive, and require a $100,000 minimum investment. And second, that is not showing a lot of regard for those of us not in the institutional shares. He did not win any points on that answer.
So your point is very well taken: if he only has 8 employees total, and 4 investment professionals, I think the $30MM in fees you stated (I calculated $25.5 MM) is not acceptable, and they should lower the 1.85% (per M) expense ratio. How about something like 1.00% to 1.25%? That should be quite sufficient.
Comments
I was pleasantly surprised when Consuelo Mack asked him about the expense ratio, and very disappointed with the answer. If I recall correctly, he said something like 'when you go to the doctor or the money doctor, you don't want to hire the cheapest you can find, but the best you can find.' I thought that lacked humility and even accuracy, considering his 1, 3 and 5 year performance as listed on Morningstar.
He continued by saying that the vast majority of mutual funds are just closet indexers, hewing very closely to an index.......and that he doesn't do that at all; he manages very actively and, and something to the effect of 'this sort of thing is very expensive.'
I scratched my head in wonderment. What on earth is he talking about? I agree with you 100%. If he had a team the size of Dodge & Cox, I could understand it. If he had stock analysts with offices in Asia, Europe, far and wide, scouring the globe for undervalued investments, I could see it. What does he do that costs so much money?
The icing on the cake.....I did not appreciate his next statement at all.......he said something to the effect that he felt that the fact that they offer lower expense Institutional shares made up for the higher expense ratios. First of all, the institutional shares charge a 1.63% expense ratio, still expensive, and require a $100,000 minimum investment. And second, that is not showing a lot of regard for those of us not in the institutional shares. He did not win any points on that answer.
So your point is very well taken: if he only has 8 employees total, and 4 investment professionals, I think the $30MM in fees you stated (I calculated $25.5 MM) is not acceptable, and they should lower the 1.85% (per M) expense ratio. How about something like 1.00% to 1.25%? That should be quite sufficient.
Regards,
Tedhttp://www.mutualfundobserver.com/discuss/discussion/12432/wealthtrack-q-a-with-david-winter-manager-wintergreen-fund-video-presentation/p1
Regards,
Ted
Evergreen: Barbra Streisand:
Lower expense, better return, lower drawdown in 2008, arguably stronger
overall fund house
http://quote.morningstar.com/fund/chart.aspx?t=WGRNX®ion=usa&culture=en-US
Add ARTGX to the chart and compare.