FYI: With Fidelity Investments resetting the fee-war bar with its new zero-cost index funds, we thought it was time to look at the best-performing actively managed mutual funds with expense ratios below 70 basis points.
Culling data from CFRA and Morningstar, the following list includes actively-managed U.S. equity mutual funds with at least $100 million in assets.
The 12-month performance numbers are through July 27 and compare to a 16.1% return by the S&P 500 Index over the same period.
Regards,
Ted
1. PRIMECAP Odyssey Aggressive Growth (POAGX)
2. PRIMECAP Odyssey Growth (POGRX)
3. Fidelity Focused Stock (FTQGX)
4. Vanguard Explorer (VEXRX)
5. Vanguard US Growth (VWUAX)
6. Vanguard Capital Opportunity (VHCAX)
7. Vanguard Mid-Cap Growth (VMGRX)
8. Vanguard Morgan Growth (VMRAX
9. Fidelity Magellan (FAMGX)
10. American Funds Growth Fund of America (AGTHX)
11 .American Funds AMCAP (AMCPX)
12. Fidelity Fund (FFIDX)
http://www.investmentnews.com/gallery/20180803/FREE/803009999/PH/12-low-cost-active-funds-that-are-beating-the-sp-500
Comments
More evidence that beating the market is not an impossible challenge. But the odds are long against that outcome.
The percentages change over time and over investment category, but those odds hover under the 5% and less odds. Those are too low from my perspective so Index products are attractive options.
However, I still like the challenge so a small fraction of my money is committed to actively managed funds. Hope springs eternal!!! The good news for me is that I own a few of the funds that Ted provided in his summary. Probably more luck than skill.
Best Regards
4.5 Fidelity Blue Chip Growth (FBGRX)
5.5 Harbor Capital Appreciation (HACAX)
5.8 Vanguard Primecap (VPMAX)
7.5 Fidelity Growth Discovery (FDSVX)
8.5 Fidelity Trend (FTRNX)
8.8 T. Rowe Price Growth Stock (PRGFX)
(BTW, the ticker for Magellan is wrong - IN's error, not Ted's; should be FMAGX)
From these "magnificent dozen", one can't infer anything.
One can't infer that management skill played any role here, since these are all growth funds. The outperformance might be due to your choosing growth over value in the past year, and may have had nothing to do with the fund managers' skill.
Or skill might have had everything to do with it, and it might be easy for managers to beat the S&P 500. The list of such funds that beat the S&P 500 is clearly larger than twelve. From the information given, you don't know whether there are just six more funds or a thousand more funds that outperformed.
In short, this doesn't really serve as evidence of much of anything. It's just a somewhat random list of large cap growth funds that happened to beat the S&P 500 over an arbitrarily selected time period (ending July 27) with an arbitrarily chosen cutoff ER.
one year is about nada, and one year-plus where growth really exploded (compare any of these with CAPE the last 18 months, say) means only that you shoulda bought a namebrand growth fund xmas of '16.
@davidmoran...I kinda of agree, but CAPE (DSENX) is still not the only "CAPE crusader"...since 2013 (FSMEX has been pretty good):
The article is about broad investing.
You can always find sector good stuff. I sure wish I had been in 4-5 Fido sectors since they came out in the 1980s.
Are there truly any other CAPE-based funds?
There are many funds with ERs between 0.70% and 0.80% that did just as well. It appears that you found three of them.
@msf, I try and fight the idea that all high ER funds are poor choices...obviously a high ER paired with a manager's out performance is not acceptable in some circles.
>> isn't sector weighting the very "secret sauce" that make DSENX so special?
well, hmm, I never thought about it that way. Not really sectors, I think. When you do regular auto-churning per valuation criteria in the SP500 space, I guess it seems to be not very close to the 115 or whatever it is holdings of Fido Sel Tech. But an interesting take.
Fido should concoct a fund based on auto-cycling among Select portfolios. There used to be a service that did that, or maybe more than one.