Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
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M*: Does The Star Rating for Funds Predict Future Performance?
While Morningstar star ratings might give a modest edge when selecting a mutual fund, no MFOer will be surprised that costs are a far more reliable indicator of future superior investor returns. Here is a Link to a Vanguard survey that reinforces that long standing observation:
Of course, fees are only one of many criteria for choosing among an endless array of fund opportunities. I recognize that most MFOers are experienced investors and have developed their own selection criteria. But MFO attracts rookie investors too, and they might benefit from a more generic presentation prepared by a trustworthy source. Here is a Link to one such discussion prepared by the SEC:
There is little debate over the advantages provided by very low cost options. My initial screening tool is the cost factor, but I integrate that with other factors to assemble a diversified portfolio.
Please comment on those considerations that guide your portfolio construction.
Comments
While Morningstar star ratings might give a modest edge when selecting a mutual fund, no MFOer will be surprised that costs are a far more reliable indicator of future superior investor returns. Here is a Link to a Vanguard survey that reinforces that long standing observation:
https://personal.vanguard.com/us/insights/investingtruths/investing-truth-about-cost
Of course, fees are only one of many criteria for choosing among an endless array of fund opportunities. I recognize that most MFOers are experienced investors and have developed their own selection criteria. But MFO attracts rookie investors too, and they might benefit from a more generic presentation prepared by a trustworthy source. Here is a Link to one such discussion prepared by the SEC:
https://www.sec.gov/investor/pubs/sec-guide-to-mutual-funds.pdf
There is little debate over the advantages provided by very low cost options. My initial screening tool is the cost factor, but I integrate that with other factors to assemble a diversified portfolio.
Please comment on those considerations that guide your portfolio construction.
Best Wishes.