Talk of The Villages Florida - Rentals, Entertainment & More
Talk of The Villages Florida - Rentals, Entertainment & More
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#33
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Managers of actively-managed non-index _mutual funds_ generally trade in and out and fund investors can get big taxable capital gain distributions from the mutual fund especially in a rising market even when they are buy-and-hold fund investors. Capital gains from _manager_ trading of a mutual fund get passed along to fund investors even when an investor has not sold their fund holding. This tax treatment generally differs from comparable ETFs as ETF investors see the capital gains when they (not the fund managers) sell. |
#34
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Without doing the research, I'm really not sure which is more tax efficient. But, my thinking is that a fund manager is forced to sell stocks to raise cash when a lot of investors sell their shares. This creates a taxable event for all shareholders. People who buy ETFs are more likely than mutual fund investors to buy and sell shares frequently, thereby creating more potential for taxable events. Several years ago, I compared the tax efficiency of the Vanguard S&P 500 index fund to the Fidelity S&P 500 index fund and found that the Vanguard fund was significantly more tax efficient. I attributed that to Vanguard having more buy and hold investors than Fidelity. |
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"No one is more hated than he who speaks the truth." Plato “To argue with a person who has renounced the use of reason is like administering medicine to the dead.” Thomas Paine |
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Also, ETF investors are buying and selling from each other on a stock exchange. If A is selling 100 ETF shares, the buyer is almost certainly another investor, and not the ETF manager. |
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#39
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Moral of the story for all of this -- it's complicated. |
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I had never heard of trailer fees, incentives paid by some mutual funds to some advisors.
Boomer
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Pogo was right. Last edited by Boomer; 03-11-2024 at 11:08 PM. |
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I opened this thread a week ago because a friend asked me to look at a report from her advisor. She is with an advisor who gets a percentage of Assets Under Management. That number is perfectly clear. But when I looked at the report, I became curious as to what kinds of fees were enshrined inside all those mutual funds, which led me to wonder what is the real cost to her of doing business.
Thank you to those who have participated in this thread by offering good information. I was going to start another thread this morning with a specific question that I know somebody here will be able to answer, but I decided to just add the question here....... The report I am looking at lists the top ten holdings, along with a lot of other funds. I would like to have a clear picture of what those holdings entail -- at least the top ten -- for a start. I was able to find part of the info on Fidelity -- even though these are not Fidelity funds. I then went to investor.gov which sent me to FINRA. After skimming through page after page of instructions on the FINRA site, I began to feel like my head was being pinched in a vise and I concluded this site must be designed for those who have a bunch of those money-handler designations after their names. Anyway, mere bumpkin that I am, I soon lost interest in continuing my quest for more info on these funds by using FINRA. Sooooo, to make my long story longer, I am finally getting to my question of the day: I am going to look at subscribing to Morningstar. I saw that they have a free 7-day opportunity. I do not want to spring for a whole year, but I think I saw there might be a monthly option that could give me time to get all my deciphering of these funds done if 7 days is not enough. Is Morningstar easier to use than the FINRA fund analyzer? Boomer (This quandary of mine is exactly why I stick to individual div stocks, cash and a few index funds that do not seem to cost much. But here I am trying to figure out if my friend is being treated fairly. Is she paying a helluva lot more than she thinks she is with just that AUM percentage? Front loads? Back Loads? Trailer Fees? Expense Ratios? Turnover Rates? And probably a few other things buried in those funds? AAAAAAAUGH!!!!!)
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Pogo was right. Last edited by Boomer; 03-14-2024 at 10:33 AM. Reason: Typo |
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After a one shot internet search of "How do I find what is in a mutual fund's portfolio?" all I came up with that might be easy to use is Morningstar. I use yahoo finance for quotes and to follow stocks and ETFs. It lists the composition of the Vanguard and Schwab index ETFs. I do not know if it follows the composition of mutual funds that actively trade.
This is likely what you have yourself already discovered from Morningstar: "How do I find a fund's holdings? You can go to Fund Quote page and then click on Portfolio tab from where you can see the the holdings."
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"No one is more hated than he who speaks the truth." Plato “To argue with a person who has renounced the use of reason is like administering medicine to the dead.” Thomas Paine |
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At one time I used the free section of Morningstar to track ex dividend dates. Now I use other free sites. |
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Mutual Fund Commissions
Boomer, we work with Fross & Fross Wealth Management and they said that If your working with a Fiduciary like them (and why wouldn't you be?) that charges a fee for service then they can't "double dip" and also receive a load or a commission. I hope that helps.
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#45
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Thanks, manaboutown and Caymus,
I have the top ten holdings of funds in my friend's advisor's report, but I want to take a scalpel to those to dissect them for as much as I can find out about the fees. An earlier search gave me only partial information for some and others I could not find at all. I probably didn't try hard enough. I have done this throughout the years -- for my own info as manager of the Boomer Fund -- by using those sources you mentioned, but I will take another look. (I used to sometimes copy Will Danoff's homework by looking at Contrafund's top ten holdings.) I must sound like a woman obsessed. I have to find out what's inside those mutual funds in fees. The AUM is the easy part. But are the internal fees fair fees? I also wonder if incentives come in other forms, not exactly commissions. Maybe I should take up crafts or day-drinkin' instead of delving into mutual fund costs............yeah, right, like that's gonna happen. Boomer
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Pogo was right. Last edited by Boomer; 03-14-2024 at 04:56 PM. |
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