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John Waggoner article on big, expensive and low [returning] funds
Good find. Waggoner's usually pretty level headed. CGM Focus? (Doesn't the "focus" kinda say alot?). Heebner was darling of growth investors not too long ago. Suspect he'll have his day again. A lot probably piled in at the wrong time after a hot run. Then, when others bail, compounds losses for those that stay behind. -
Surprised to see the Calamos fund (CVGRX) on the list. Good fund house. The 1.26 ER's not cheap, but not bad either for a growth fund. Waggoner lists a respectable cumulative gain of +37% for three years. From the USA Today tracker I get: YTD +9.23%, 3YR +11.06%, 5 YR 0 (flat). Yikes, not what I"d expect to see for a bottom dweller. There's a 4.75% front load which may be bugging Waggoner.. Probably is included in the return figures.
Calamos Growth A (CVGRX) is a large cap growth (M*) or multi-cap growth (Lipper) fund with 80% invested in the US -close to a global fund, but not quite. More important is that its expense ratio is in the third quintile (not lower than the 75th percentile), per Lipper (the source of data in the article). So Waggoner is just wrong here.
When M* reports fund performance, it is independent of front end load (but does incorporate ongoing loads of B and C shares). Lipper seems to be the same - we can see this by comparing the A share performance with the C share performance over three years. (The extra 12b-1 fee on the C shares over three years adds up to a lot less of a drag than the 4.75% drain from the A share's front end load). Yet the A share's total return is in the 2nd lowest quintile, while the C share's total performance is worse (it lands in the bottom quintile). That shows that front end loads aren't included in performance ratings..
Regardless of ERs, there are a number of funds on the list that used to be good years ago. Calamos is one of them. Some others that surprised me were Longleaf, Victory, and RS Partners. But it looks like this list is fatally flawed. Longleaf Partners (LLPFX) total return was in the top quintile over the past three years, RS Partners (RSPFX) was in the middle quintile over the past five years. All data from Lipper.
Reply to @msf: Thanks - Was actually revising & correcting my initial comment as you penned yours. Yes - it's not a global fund as I earlier stated. Tried to correct it overnight before anyone noticed. You're too darned quick (-:
Comments
Surprised to see the Calamos fund (CVGRX) on the list. Good fund house. The 1.26 ER's not cheap, but not bad either for a growth fund. Waggoner lists a respectable cumulative gain of +37% for three years. From the USA Today tracker I get: YTD +9.23%, 3YR +11.06%, 5 YR 0 (flat). Yikes, not what I"d expect to see for a bottom dweller. There's a 4.75% front load which may be bugging Waggoner.. Probably is included in the return figures.
When M* reports fund performance, it is independent of front end load (but does incorporate ongoing loads of B and C shares). Lipper seems to be the same - we can see this by comparing the A share performance with the C share performance over three years. (The extra 12b-1 fee on the C shares over three years adds up to a lot less of a drag than the 4.75% drain from the A share's front end load). Yet the A share's total return is in the 2nd lowest quintile, while the C share's total performance is worse (it lands in the bottom quintile). That shows that front end loads aren't included in performance ratings..
Regardless of ERs, there are a number of funds on the list that used to be good years ago. Calamos is one of them. Some others that surprised me were Longleaf, Victory, and RS Partners. But it looks like this list is fatally flawed. Longleaf Partners (LLPFX) total return was in the top quintile over the past three years, RS Partners (RSPFX) was in the middle quintile over the past five years. All data from Lipper.