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Mutual Fund Fees

13 Responses to “Mutual Fund Fees”

1. creditcardfree Says:
   November 2nd, 2013 at 06:56 am
   A quick look at a common American Century Fund...and that expense fee is 1.25%! I looked at Morningstar.com. If this money is in a 401K there isn't much you can do, but if you own them in an IRA, you can at least cut your losses and move (transfer) to a low fee fund. If you own them in a taxable account that will be a taxable event. I suppose you could STOP contributing to your 401K as another way to stop the losses and invest in ROTH IRAs. I would also tell your employer about this issue, to see if changes can be made to the plan.
   
   

2. My English Castle Says:
   November 2nd, 2013 at 08:50 am
   I am more than a bit abashed. I worked in brokerage for 10 years, and I know about fees. Even though my American Century fund has a fee of less than 1 percent (doesn't sound too awful, does it?), the comparison to super low-fee funds is staggering. I'm calling vanguard on Monday. Yikes.
   

3. MonkeyMama Says:
   November 2nd, 2013 at 09:03 am
   It's better late than never.

4. creditcardfree Says:
   November 2nd, 2013 at 10:11 am
   Agree with Monkey Mama, better late than never!!

5. sarah Says:
   November 2nd, 2013 at 12:16 pm
   Hello: You are an academic correct? You may have access to TIAA-Cref. They have some of -- if not the lowest fees on the market. They are also performing well above market at the moment. When I saw The Retirement Gamble I was very thankful I had access to them. I think you should look into them.

6. Jenn Says:
   November 2nd, 2013 at 04:37 pm
   I went through that exercise earlier in the year when the accounts became required to expose the fees on my statement. I also had American Century funds and seeing the fees made me angry.
   
   You may want to research your 401k options. A little known option in our plan is that we can have up to 50% of the total invested in a Charles Schwab account. Because the 401k is managed by JP Morgan, they don't advertise this and they make it difficult to transfer money to the Schwab account, but it can be done over the phone. Once I did that, all the Vanguard funds (as well as stocks, etc.) became available to me.

7. My English Castle Says:
   November 2nd, 2013 at 11:23 pm
   I do have a TIAA-Cref account at work, and am happy with it. The American Century holdings are in my IRAs from years ago when I was in brokerage. I'm going to start the research process and begin moving things as early as next week, I think.

8. Buendia Says:
   November 3rd, 2013 at 08:18 am
   I recently pulled everything out of Morgan Stanley (I had some there, and some in Vanguard) for this very reason!

9. rob62521 Says:
   November 3rd, 2013 at 12:22 pm
   Quit beating yourself up...you can't know everything and you can still make changes.

10. soogar Says:
    November 3rd, 2013 at 01:11 pm
    I've been thinking about fees a lot. My boyfriend's mother is wealthy and she pays an advisor fees to manage her estate. I've seen a lot of investment statements in my line of work and most ultra high net worth people pay more than 1% in fees to invest their money and they don't limit themselves solely to index funds. So I don't know how to judge fees. There are some funds that have loads and 1% fees that do better than index funds. If someone is a good manager, or if the fund is more aggressive and there is a lot of trading, is a fee justified?
    
    
    Edited to add that my bf's mother was unscathed in the 2008 stock market downturn so her manager did well in preserving and growing her wealth.

11. My English Castle Says:
    November 3rd, 2013 at 05:26 pm
    @soogar. I know there are funds out there that "beat" the market but look at this data that shows that after you factor in fees, 69 percent of the time index funds do better than actively managed funds.
    
    http://www.cbsnews.com/8301-34227_162-57578427/how-index-and-active-funds-stack-up/
    
    While some funds do better some years, it's hard to beat that percentage and I'm (obviously) not that good at picking which fund will do well every year. And my relatively simple mutual fund portfolio is probably a great deal different than the portfolios of rich folks who need to think about different tax implications.
    
    Not to doubt your boyfriend's mother, but among the people I knew in brokerage, people tended to talk about their wonderful gains a heck of lot more than they talked about their losses.
    

12. starfishy Says:
    November 3rd, 2013 at 06:20 pm
    one option is to roll the old IRAs to TIAA-CREF. do you have a campus TIAA-CREF rep? if so, make an appt or call and they can do the work for you. good luck with whatever changes you choose to make.

13. soogar Says:
    November 3rd, 2013 at 10:11 pm
    Everyone seems to be inclined to choose similar index funds which contain similar stocks. with so many people investing in the same thing and then possibly withdrawing funds at the same time, how will the fund and underlying stocks maintain the same value? i am invested in several funds, two index funds and two managed funds in particular sectors. I''ve been looking at some funds that specialize in dividend income and they have higher fees than an index fund. I don't know how bad fees really are. You look at how they rank against the index but maybe managed funds don't lose the same amount of money in bad years as an index fund. It takes a lot of skill and research to manage a fund. I won't say that fund managers do not deserve compensation. Obviously a lot of people choose more managed funds and don't worry so much about fees because their end objectives are achieved.

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