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Consuelo Mack's WealthTrack: Guest: Charles Dreifus, Manager, Royce Funds
So the fund (RYSEX) was closed to new investors in 2012. The closing was a result of "a lack of opportunities in the market". The fund remained closed and held very little cash since no new money was coming in.
Had he left the fund open, the fund would have accumulated cash (not necessarily a bad thing to new and old investors).
Had he left the fund open, he could have deployed this cash during a dip in the market (opportunity).
Instead, "no one came to party" (no one bought into his fund) after it re-opened. As a result, his fund bought very little new opportunities and I want him managing my money why?
He's suggestion of VSMGX at the end of the interview is really an index allocation fund strategy.
This is a fund that's made up of 4 index funds (fund of funds). Index funds have no active management and therefore no active down side risk strategy, they rise with the market and fall with the market. Only the bond index allocation in the "fund of funds" serves as the ballast to the equity index allocation. VWELX has a similar equity/bond allocation, but through active management has navigated the upside and downside with greater success.
Here's the comparison over the last ten years VWELX outperformed VSMGX 9 out of 10 years):
Finally, I find it interesting that a active manager is recommending an non-active index fund.
Comments
So the fund (RYSEX) was closed to new investors in 2012. The closing was a result of "a lack of opportunities in the market". The fund remained closed and held very little cash since no new money was coming in.
Had he left the fund open, the fund would have accumulated cash (not necessarily a bad thing to new and old investors).
Had he left the fund open, he could have deployed this cash during a dip in the market (opportunity).
Instead, "no one came to party" (no one bought into his fund) after it re-opened. As a result, his fund bought very little new opportunities and I want him managing my money why?
He's suggestion of VSMGX at the end of the interview is really an index allocation fund strategy.
This is a fund that's made up of 4 index funds (fund of funds). Index funds have no active management and therefore no active down side risk strategy, they rise with the market and fall with the market. Only the bond index allocation in the "fund of funds" serves as the ballast to the equity index allocation. VWELX has a similar equity/bond allocation, but through active management has navigated the upside and downside with greater success.
Here's the comparison over the last ten years VWELX outperformed VSMGX 9 out of 10 years):
Finally, I find it interesting that a active manager is recommending an non-active index fund.
I do own VWELX.