Barron’s Funds Quarterly+ (2024/Q3–October 7, 2024)

yogibearbull

Barron’s Funds Quarterly+ (2024/Q3–October 7, 2024)
https://www.barrons.com/topics/mutual-funds-quarterly

(Performance data quoted in this Supplement are for 2024/Q3 and YTD to 9/30/24)

Pg L2: With the new CEO Salim RAMJI onboard, Vanguard is making some changes. Rather than lowering the ERs by tiny/small amounts across the board, it will move selectively in areas of active management with disruptive low ERs, with an initial push into active bond funds. It has also developed in-house capabilities for bonds, unlike its equity and allocation/hybrid funds that mostly use external advisors. In the passive area, the ETF giants are Vanguard and iShares/BlackRock, and mutual fund giants are Vanguard and Fidelity (not so well-known). But growth in the passive fund area is limited for these giant players. That game has been played and these parties have won.
Growth areas now are ETFs (tax-efficiency and market hour trading), bond funds (much larger and fragmented market compared to equities), alternatives (private-market is huge now as many unicorns and smaller companies remain private longer; but Vanguard won’t touch cryptos), RIA channels (but that won’t work without improving Vanguard’s poor M-F, 8-8 customer service). Rather than pushing into all areas at once, it will move selectively into areas with maximum disruptive low-cost effects.

Pg L7 In 2024/Q3, gold funds, China funds and bond proxies (bond funds, utilities, real estate. Dividend stocks) rallied due to geopolitics (for gold), the Fed rate cut and China easing. The value funds also did well. (By @LewisBraham at MFO)

More on Funds & Retirement

INCOME. Dividend and dividend-growth stocks are coming back in favor after the Fed rate cut. US ETFs: SCHD, VYM, VIG, DIVB; China ETF: PGJ. Several stocks are also mentioned.

RETIREMENT. MEDICARE open enrollment period (OEP) is from October 15 – December 7. As there are many changes for Parts B, D, C/MA, don’t just throw away the recent notices you got about them; drug formularies may change too. Part D will have $2K out-of-pocket limit for covered drug costs (so, you will be out of luck if the drug isn’t covered); premiums will also go down a little. Medicare Advantage/C plans face higher costs and tighter government reimbursements, and many insurers are curtailing (reducing extra coverages, increasing premiums & deductibles) or exiting (Wellcare/Centene-CNC in 6 states) the MA/C market. Humana MA dropped a notch in its government rating and is discontinuing MA/C in 13 counties. If your MA/C plan is discontinued, and you don’t do anything, you will be enrolled in the original Medicare and will have the opportunity to get Medigap insurance without medical underwriting; normally, it’s hard to go back from MA/C to original Medicate due to the underwriting required for Medigap insurance. Make sure that your doctors are still in the plan.

Barron’s weekend issue has CASH TRACK charts showing 4-wMA of flows. A screenshot link will be included quarterly in the Summaries.
https://i.ibb.co/Chcbzrj/Barrons-Cash-Track-100524.png


Barron’s discontinued quarterly FUND CATEGORY PERFORMANCE table in 2024 that were used to highlight the best and the worst performing fund categories. The new MFOP Quarterly tool (see MFO, October 2024) can generate a similar table and the screenshot links for Top 5 and Bottom 5 follow. Both Barron’s and MFOP use Lipper fund databases.

Q3 Top 5 https://i.ibb.co/bJT3M6T/MFOP-Quarterly-Top5-100424.png


Q3 Bottom 5 https://i.ibb.co/CwV2Vx3/MFOP-Quarterly-Bottom5-100424.png


LINK

Crash

As ever, I am glad to see these items, yogi. Thank you.

Sven

Thank you for the detailed summary.

Vanguard got their work cut for them, especially with their customer service. There should be a lot more than broadening their ETF offerings and lower their expense ratios.

Observant1

"Vanguard got their work cut for them, especially with their customer service."

The article suggests Vanguard could deploy AI to potentially solve customer service complaints.
AI can help customers with generic queries.
How will AI help customers who are unable to wire money from other brokerage accounts
or fix problems with Vanguard's two-factor authentication system, for example?
These are real-world problems experienced by Vanguard investors.

I haven't been following Vanguard's partnership with private-equity firm HarbourVest Partners closely.
Karen Risi, who oversees Vanguard’s product development among other responsibilties, stated:
“Over time, we, like everyone else, are watching private companies staying private companies for longer.
So, we are having a conversation about, Should we offer something in private markets so that we can
democratize access for our investors, which is part of Vanguard’s mission?
Can we do it at scale and at low cost?”

Since numerous companies now opt to remain private for much longer than before,
it will be interesting to see if Vanguard creates an attractive PE vehicle for "smaller" investors.

yogibearbull

Some posters here may remember that years ago, Vanguard tried to be disruptive in the market for variable-annuities (VAs) with income-riders (GMWB, GLWB). People thought that was odd for a major low-low-cost indexer to jump into a product with the highest ERs. VG was disruptive all right for a while - its ERs were about half of the industry norms, but still high. However, as its losses grew, it first increased the ERs of these VA-GLWB, and eventually, got out of that business.

Then, years later, it dumped its entire VA operation on to Transamerica, and now only manages the VA funds for fees.

So, the talk of being disruptive is easy, but stamina and staying power are something else. I am glad that it has chosen active bond funds for its first big disruptive push (should Pimco be concerned?). Hopefully, nothing much can go wrong there. But as it goes into other areas such as private markets, RIA business, things may not go as easy.

Sven

@Observant1, I have been investing with Vanguard since the 90’s before the internet age. My frustration with Vanguard today is their customer support simply cannot keep up with our needs. As a Flagship customer, we use their special phone number where we can talk with a live agent. For most part, this has not work so well for us. We tried private messaging and that have not work on a timely basis. I found many of our questions through their search engine or through Bodgheads website. At present, Vanguard does not have a simple AI-based chat function. In the end, we figure that their customer support is not able grow fast enough to keep up with the company. Many Boglehead posters are experiencing the same thing I am.

We still like Vanguard as a low cost brokerage. Honestly I hope Vanguard will be successful in their customer service with advanced AI capabilities.

Mona

@Sven, you are able to talk with a Flagship rep (I assume that you have a dedicated rep) without a problem, so specifically what has not worked out well?

Sven

Flagship investors at Vanguard get few perks such as 25 free trades on transaction fee OEFs per account. All our transactions are online, thus there is no fees. There is no dedicated rep for Flagship customers.

A year ago, we set up Personal Advisor Select service to manage our retirement funds. Initially the asset allocation plan was set up on phone calls and I revised them several times using their messaging system. The dedicated rep cannot be reached by phone, and it takes days to get return calls. The account set up took several months to complete.

What broke the camel’s back was that when my wife talked with the agent in case I passed on before her, she found the rep to be inexperienced to rely on. My wife is well informed of our proposed plan. We tried the discussion several times but we were not successful. Our goal is to have a human touch in managing the retirement funds. In the end, we exited our PAS relationship with Vanguard.

Derf

Sven + ONE !!

Mona

@Sven, the quality of Vanguard's customer service, support, and IT folks (at least at their headquarters), appears to be lower than Schwab or Fidelity. With many colleges and universities within a 25 mile drive of Malvern (Penn, Drexel, Temple, Villanova, St. Joseph's, Swarthmore, Bryn Mawr to name a few), certainly a large talent pool is at their fingertips. I can only conclude that pay is the issue.

catch22

Thank you, Yogi.

sma3

I think the other issue is they went to a "team" approach, so even if you have substantial $ you do not get one individual to work on your issues, unless maybe you pay for "personal advisor". I explored using their Personal Advisor but they only use Robo funds/etfs and made no reference to legacy positions with large capital gains

I don't know but I left and never looked back