American Funds Trails
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[quote=gew21][quote=zacko]
American funds is an above average family--but no way do they deserve the asset in flows they have achieved.
Combine the fact of poor wholesaler service, minimal support for client events, and bloated asset sizes (precursor for upcoming poor performance)--my question would be why do they STILL GET over 1/2 of all load fund business? It makes no sense to me at all. On top of that, they have no true small or mid value domestic funds.
Capital Income builder and Income fund of america have over 60% of their holdings identical. Large overlaps in other american funds as well.
Sometimes I think brokers are just as bad (if not worse) as clients when "following the herd."
Please tell me where I am incorrect?
[/quote]
I wouldn't post, but you wanted to know where you were incorrect. I agree that American doesn't deserve the inflows they have recieved, b/c the wholesalers don't do SH%^! I also agree that brokers follow the herd. I think it is crap they hold trails for the first year, and I think the ship is getting to big.
Where I differ is the often exageration of "Overlap", ya it's a real thing but people don't take certain things into perspective. The real overlap between Income Fund of Amer and CAIBX is 39% based on March 31st of 2006, and that is alot. So, 39% of the fund is the same right? Not really. Chevron makes up 1.42% of Income fund, but it makes up .38% of Capital Income; however, overlap doesn't take into account the weighting of those positions in each fund. So, ya I hate American cause "generally speaking" there wholesalers don't hike for anything. But the overlap example you gave was exagerated a little.
Hey Rev,
Real original by the way, picking on the Growth Fund of American's 5 year number, your sharp buddy. Let me know some of your favorite fund companies that you work with. I doubt any of those families have a fund that hasn't performed well over some 5 year time frame, seriously. I'm not in hear to defend Jones and American, but ignorant comments like your post about Bond's outperforming AGTHX over 5 years is just asking for it. How is AGHTX's 1 year, 3 year 10 year, lifetime????? No, you won't mention that, just pick a crappy time frame and exploit it. Get a life.
[/quote] I have a life,sparky. It's called truth. The point is, to all those uninformed, is that if you look at the 20 largest funds, (of which GFA is the largest) the only bond fund in that list is Pimco Total, and Pimco falls EXACTLY in the middle (median) of all the 20 largest for the 5 yr. performance.What that tells me is that the 20 largest represent about 25% of ALL fund assets and this probably represents what the average fund investor is experiencing. Crappy time frame? How about the fact that 75% of the wealth in this country is controlled by those 50+. You think 5 yrs. of poor performance is significant to these people? Represents 20% of their actuarial life! The exploitation of these folks is using LONG time frames and IMPLYING this will be their results.As far as what I recommend (and do with some of my personal $$) is use an allocation, etc. Better funds than GFA, I might add. Now, let's use the past 40 yrs. What's the difference between a 100% equity portfolio (S&P)and a 60/40 allocation?? Look it up.gew: P.S. It’s you’re NOT your, it’s here NOT hear. You used bond’s as possesive instead of plural (bonds). You could use bonds as possesive as in bond’s performance. And you called me ignorant? Maybe shuda used ignert.