Home Forums Hunting & Shooting Hunter's Campfire mutual fund question

Anyone here know of a good screening tool to help ID mutual funds that has outperformed their indexes of long time periods? like 30-50 years...

Dave

Check Morningstar. Each fund family will post the performance of each of their funds as well. Keep expenses in mind right along with performance. IMHO you should stay away from funds that charge a load. There are lots of good funds out there that don't charge a load.

I doubt any exist that meet that criteria. 30-50 years is a long time.

As an aside, it is very easy these days to buy ETF's that exactly track the indexes that everybody benchmarks themselves against. You can simply "buy the market" and be done with it.

I don't put a whole lot of faith in these guys, but here is a site with lots of research. http://www.morningstar.com

another question or two..

1. why would you go with an ETF over a regular index mutual fund?
2. Why do you have a lack of faith in morningstar?

etf's are cheaper to own than actively managed mutual funds. you dont "beat" the market (you'll match it.....) but you dont pay alot of fees to do so, either. if you have alot of $$ involved, those fees really start to stack up, and the truth is, its hard to beat the market, consistently.

I would imagine Fidelity's Magellan Fund would be one of the few to meet that criteria.

Fidelity Magellan has lagged its index (total stock mkt) rather badly over the last 25yrs.

Agreed, but given the time frame given, it is probably one of the few that has beaten the S&P over "30-50 years".

Not too sure it has beaten the mkt, even over 50 yrs.

There are probably at least three people in the world who know less about this schit than I do. On the other hand, my wife has (among other credentials) a PhD in finance and teaches (among other things) portfolio management to MBA candidates. I don't pretend to know why, what, where or how, but I know she doesn't have much use for mutual funds. When she has the time to apply to it and when she feels the stars and planets are in alignment, she makes a lot of money commodity trading.

Easily.

Magellan 1963-2014

Just buy an S & P fund and take the guess work away. There are very, very few that beat the S & P over 30 years.

Those Morningstar charts Do Not take in to account the high expense ratio and high portfolio turnover costs of the Magellan fund. If they did, you would be in for a big surprise. I respectfully disagree with your evaluation.

Magellan did so well in its early years (under the management of Peter Lynch, IIRC) that even if it tracked the S&P for the last 25 it would still be way ahead. And at a .50% fee, it is not exorbitant.

FYI, I do not think I have ever owned a Fidelity mutual fund.

Unfortunately, It did not track the s&p over the last 25 years. It performed much worse. Lets not forget turnover (portfolio) costs. Most people do not realize that if a fund has 80% turnover you can add approximately another .8 % to the expense ratio for your total cost of fund management. If a fund has 125% turnover, then add 1.25% to the expense ratio for total cost. These are "hidden" fees that most investers are unaware of. Also, in the good days of the Maggellan fund the expense ratio was quite a bit higher then present times. These transaction costs are the fees the "fund" (owners) pay for the selling and buying of different stock by the fund managers during the course of the year. These costs are negligible for an s&p index as no stocks are sold or bought ( for the most part).

Not since Peter Lynch left.

I can get out of an ETF during the day, place stop orders etc.
As for Morning Star, the whole problem with using past performace to evaluate funds is it's PAST performance. That's what someone else got, not what you will get.

You are better off choosing funds from companies that have produce good results, i.e. more 4-5 star rated funds then 1-2 start rated funds then choosing an individually well rated fund.

In addition, what the change in fund managers. MS rates funds, not fund managers or management companies. Changes in fund managers need to be taken into account when choosing funds.

Get Vanguard index funds. They track their indices well and are very low fee.

There is no point to buying an index mutual fund. Just buy the etf.

1. You can buy an etf, pay the trade commission, and it never costs you another penny until you sell it. If the index is the benchmark everybody tries ( mostly unsuccessfully) to meet or beat, why not just buy the index and be done with it?

2. Morningstar, like any other rating agency, just tells you what they think in the best case. In the worst case, they tell you a bunch of BS just to get your money where they want it. At the end of the day, it's just another guy's opinion. If you are going to invest your money, YOU have to know. Nobody in the business at any level is as worried about your money as you are. Start reading every day, use some common sense and discipline and almost anybody can come up with a long term investing plan that will work. 5 or 6% compounded annually is a lot of money over 20 or 30 years.