Bogleheads.org

nisiprius

I think an interesting question is: how does it benefit Vanguard to offer these funds?

nisiprius

but it is not an index of the 500 largest-cap stocks. Do you by chance know what the largest-cap companies are that are not included? Not offhand. But the list of the CRSP Large-Cap Index constituents is here . For the S&P 500, we can use either Wikipedia's list or the list of holdings of the Vangu...

nisiprius

I think this is an interesting fact about the S&P 500: it is about 99% US, 1% international. Not 100% US. It doesn't actually matter; inclusion is based on being listed on a US stock exchange; and the "international" companies are in many cases former US companies that moved their legal domiciles ov...

nisiprius

A perfect example of asymmetrical information. It depends on the demand for the car, which you might not know. It depends on how overpriced the MSRP is to begin with, which might not be the same for every car. It depends on what factory incentives, SPFs, whatever they call them, the dealer gets for ...

nisiprius

I invest in them because they are the lowest-risk investment I know. Unlike bank accounts, they are protected against inflation. An absolutely key feature, which many people do not understand, is that although they are called "bonds," unlike normal marketable bonds they are free from interest rate r...

nisiprius

Since I have no way I can invest directly in Yale's endowment fund, and no way I, as a "mass affluent" retail investor can duplicate the fund's investments personally, it's all irrelevant and there's no reason to care. I can either ignore it, or I can get suckered by various people and products flin...

nisiprius

https://imgur.com/KPMKxBQ.png Briefly: In ye olde days, meaning in between about 1952 to 1973, inflation was low. Since the Depression, banks had been tightly regulated. One issue was that banks borrowed short (paying interest on bank accounts) and loaned long (30-year fixed-rate mortgages). That w...

nisiprius

Inclusion in the S&P 500 isn't based strictly on market cap. Depending on definitions, it contains 10%-15% mid-cap. It is an index that is predominantly and on average large-cap stocks, it is "a large-cap index," but it is not an index of the 500 largest-cap stocks. S&P says that it is an index of "...

nisiprius

The issue, it seems to me, is the bias (especially woth drugs) of receiving compensation related to prescribing expensive drugs from the manufacturers. Do you really think that the average physician is going to be influenced adversely by a pizza or sub-sandwich lunch for him/her and some of the off...

nisiprius

I see nearly every doctor from my city on this list. What am I supposed to do with this knowledge? Be aware of it; perhaps be ready to at least ask a question or two if your doctor is recommending a drug that's being advertised direct-to-the-consumer on TV, for which there are old equivalents; and ...

nisiprius

With regard to the nature of the BTOP50 index, I emailed BarclayHedge with some questions and received a reply saying: --returns are net of fees --the April return as of April 18 reflects an estimate of the Index return from April 1 - 17 based on the daily returns of he underlying funds. --The advis...

nisiprius

[And a later edit - I found Vanguard's announcement of the name change from Institutional to Admiral - https://pressroom.vanguard.com/news/Press_Release_Vanguard_Prime_Tax_Exempt_MMF_for_Indiv_06.16.15.html Bingo. Thanks to Dantes and to whose who pointed out that institutions can't hold this any m...

nisiprius

It's not totally meaningless. As far as I know, to date, there has been exactly one money market mutual fund that has ever collapsed, and oddly enough it was the grandaddy of them all, the Reserve Primary Money Market Fund. The final outcome was that all of the fund's investors eventually got almost...

nisiprius

munemaker wrote: ↑
Thu Apr 19, 2018 6:04 am
No, I don't think it is a mistake.

The Admiral shares are to pass lower expense ratios on to larger account holders (not for pikers).

Every other Admiral share-class fund I know of has a minimum of either $10,000 (index funds) or $50,000 (non-index funds).

nisiprius

Do you think this is a goof and someone typed "Admiral" when they meant to type "Institutional?" It's too rich for my blood, that's for sure. VMMRX web page https://imgur.com/t53FTHQ.png It's "fund number" 0066; the best evidence I see of a goof is that the actual HTML page title code is "<TITLE>Van...

nisiprius

Tangentially, I was surprised to realize that the Vanguard Prime Money Market Fund currently has the highest expense ratio of all the mutual funds I hold. It's not that it's a big deal or worth fussing about, but... does know where to find past expense ratios? I'm almost sure that it used have the l...

nisiprius

Very likely the people who select funds for your 401(k) only choose funds that have outperformed in the past, so it's 20/20 hindsight. The problem is that there's no evidence that outperformance persists. For example, Morningstar has officially acknowledged that its star ratings do not show persiste...

nisiprius

Barclay BTOP50 Index The BTOP50 Index seeks to replicate the overall composition of the managed futures industry with regard to trading style and overall market exposure. The BTOP50 employs a top-down approach in selecting its constituents. The largest investable trading advisor programs, as measur...

nisiprius

There is a classic article out there called "Alpha Hunters and Beta Grazers" by Martin Leibowitz. It talks about under what conditions you should be active - "Alpha", and when passive - "Beta" It is here, Leibowitz, Martin A., Alpha Hunters and Beta Grazers. Financial Analysts Journal, Vol. 61, No....

nisiprius

Lack_ey, I agree that the shape of the BTOP50 index looks more like some kind of continuous, smooth slowdown, not a corner at 2007. I'm not quite sure what the BTOP50 Index is; these don't seem to be mutual funds: AlphaGen Capital Limited (Long Short Agriculture Fund AlphaSimplex Group, LLC (Managed...

nisiprius

...So, what am I to conclude? course of action?... In my case, my chosen course of action is: Ignore "innovative" mutual funds that, for the first time, finally bring to retail investors strategies and asset classes, formerly available only to sophisticated wealthy investors, hedge funds, and insti...

nisiprius

I just look at my list of holdings on Vanguard's websites, see that the highest expense ratio of any fund I own is 0.16%, figure the weighted ratio must be lower than that, and, frankly, feel that's all I need to know. The last time I calculated a weighted average expense ratio was when someone is f...

nisiprius

It also feels more like "normal equilibrium." And personally, at the moment, being a retiree with important cash and bond allocations, my unhappiness at the one-year return for Vanguard Total Bond and Vanguard Inflation-Protected Securities only having been 0.09% and 0.38% respectively, is tolerable...

nisiprius

This "theoretical question" is, in fact, a standard (and nonsensical) talking point that is often made as an attack on index funds. It makes as much sense as asking Theoretically, what would happen if every 100% of all Apple stockholders placed "sell" orders for all of their Apple shares? Theoretica...

nisiprius

...The raison d'etre of CTAs (commodity trading advisors, i.e. managed futures) has always been crisis alpha... Well, look at the chart. Both the index and the category average existed in 2008-2009. What do you mean by "crisis alpha?" If you mean that they stayed level instead of plunging in 2008-2...

nisiprius

Excellent thread. I'm late to the conversation. You may find these two links interesting: 1. https://s3.amazonaws.com/static.contentres.com/media/documents/1272fad4-2828-4f8e-9be2-0125290f17a7.pdf I don't find it interesting, I find it frustrating because I am 99.9% certain that it is just plain wr...

nisiprius

Fund fees predict success or failure The expense ratio is the most proven predictor of future fund returns. We find that it is a dependable predictor when we run the data.... we have updated the data to show just how strong and dependable fees are as a predictor of future success. That's not to say...

nisiprius

...One question though for the Total market gurus here: Why does one of the most successful investors in the world, repeatedly stress (in his 2018 annual letter) that one should invest in the American economy for the long term, specifically the S&P 500. He never once mentions investing in the the T...

nisiprius

I think it's a Good Thing. More information is better. According to the article, the fund companies affected were calculating this already and disclosing it to institutional investors, so it shouldn't cost them anything to comply--and it can't cost that much to comply anyway. Why shouldn't retail in...

nisiprius

Protégé Partners specializes in fund-of-hedge-funds investing. That was their schtick, that's why Seides did it. In their words, Through tenured judgment, deep-dive due diligence and pro-active risk management, we strive to identify best-in-class managers and put capital to work through arms-length,...

nisiprius

Warning: 1) I have not used mine underwater. I haven't even tried it out underwater. 2) Obviously this isn't a professional-quality camera. My little Sony DSC-TX30, which is so small that I just have it on me all the time--including right now--in a holder on my belt is supposed to be waterproof. As ...

nisiprius

...[CRSP has] a megacap index, largecap index, midcap index, and smallcap index. The large cap index corresponds to the combination of the midcap and megacap indices . This means that all stocks in the midcap index are contained in the largecap index. The largecap index contains just a little over ...

nisiprius

...Investors are certainly free to stick with a U.S.-only portfolio — but they shouldn't think that they don't have any exposure to the risks (currency and otherwise) of international and emerging markets. Last time I checked, U.S. companies in aggregate derive about 37% of their revenues overseas....

nisiprius

He's probably using numbers from MSCI. MSCI World IMI total market cap is 45.92 trillion. MSCI Emerging Markets IMI total market is 6.33 trillion. MSCI's EM indexes include South Korea as an emerging market. I think that's it. That would do it. I see that Fidelity's FSGUX, which uses MSCI ACWI Ex-U...

nisiprius

I don't think the difference between EM = 9% vs 13% of global market cap is important. It's just a puzzle. I can't seem to account for it by including China A shares or taking account of the recent US stock market fluctuations. ADDED: I think Selters, below, got it. It's probably MSCI's categorizati...

nisiprius

It's awfully good. It's too bad that there are things in it that are glaringly out of date. I haven't gotten to the part, except to glance at it, where he become an advocates for Joel Greenblatt and the "Magic Formula." I am trying to decide whether to give it as a gift to my twenty-year-old grandda...

nisiprius

Added: Selters, below, figured it out, I think. MSCI's index and category definitions include South Korea as an emerging market, and South Korea is about 2% of world global market cap, and that's just about enough to account for the difference. It's not a big deal, but does anyone have a source for ...

nisiprius

Never heard of this before... well, I see that the only one in my state isn't near where I live--isn't offered in the Costco I usually go to. I would have thought that most primary care doctors would be doing this, and more than this, but it might be a nice little plus for people who, for whatever r...

nisiprius

You can do almost everything you asked for, except for taxes, using Morningstar growth charts. See this article. Growth charts include dividends. The big Morningstar trick is that you must begin by plotting a mutual fund first if you want to get growth charts. You can then add ETFs or individual sto...

nisiprius

...It is hard to figure out how he actually invest his own money from the podcast... I can't find the archived copy in the archive.org Wayback Machine--"his" website seems to have morphed from mebanefaber.com to mebfaber.com to worldbeta.com... and he was involved in something called the "Ivy Portf...

nisiprius

American Funds are not bad. William J. Bernstein remarked that privately held fund companies (including American and Fidelity), which only have to satisfy the company owner, seem to have lower fees and be generally less greedy than the public companies that have to answer to their shareholders. I wo...

nisiprius

With regard to "this is just how you'd expect these things to perform during a bull market," a couple of points. First, I did not compare them to stocks, nor bonds, nor 60/40. The only reason I showed stock and bonds was to show what happens when you look at category averages instead of known-in-hin...

nisiprius

In the space of one hundred and seventy-six years the Lower Mississippi has shortened itself two hundred and forty-two miles. That is an average of a trifle over one mile and a third per year. Therefore, any calm person, who is not blind or idiotic, can see that in the Old Oolitic Silurian Period,'...

nisiprius

...Yeah, one needs to be careful about using the Morningstar breakpoints for evaluating index funds that may use different construction methodologies. The same goes for the value/blend/growth scale, as Morningstar also uses definitions that differ from many index funds (including Vanguard). Mid-cap...

nisiprius

...One of the key principles here seems to be to use an index fund to let the market decide on how much of my money should be invested with each company that issues stocks... I'm curious to know if anybody thinks the same idea should guide a person's allocation of stocks to bonds. I did a quick goo...

nisiprius

Looking at individual funds is like the people who say--with a straight face, I think--that active funds are superior to index funds and that the SPIVA results are misleading--because investors are smart enough to invest in the good active funds, not the bad ones. Why, just look--all the active fund...

nisiprius

A disservice is done every time the Trinity study is equated to a retirement income withdrawal strategy. As the latter, it would have to be the worst method. The thought of setting a withdrawal rate, then never looking again at actual outcome, portfolio balance, inflation, etc. is reckless. A disse...

nisiprius

In my case, the obvious one. Right or wrong, I have personal preferences, that I hold with sufficiently high conviction that I prefer to set my own allocations. I just can't quite bring myself to accept a target date fund or a LifeStrategy fund, when it's so easy to cook my own from scratch. I just ...

nisiprius

What I envision as maybe a more representative analysis (but impractical for our purposes, taking too much work) would be to consider the effects of adding each individual fund to a baseline portfolio. Then we can say something like "X% of large blend funds improved portfolio outcomes, Y% made port...

nisiprius

NAESX; VTWO (Vanguard Russell 2000); VIOO (Vanguard S&P Small-cap 600); IJR (iShares Core S&P Small-Cap)

Poor Vanguard NAESX. Looks like it landed just on the wrong side of Morningstar's arbitrary line.

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