Lipper awards: Vanguard the new victor

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BeachPerson
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Lipper awards: Vanguard the new victor

Post by BeachPerson » Wed Feb 28, 2018 7:43 pm

New Victor
The Tuesday evening award ceremony in New York saw the Malvern, Pa.-based fund complex capture 29 trophies by 14 different mutual funds.
Great PR for Vanguard
David | | From Jack Brennan's "Straight Talk on Investing", page 23 "Living below your means is the ultimate financial strategy"

Spirit Rider
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Re: Lipper awards: Vanguard the new victor

Post by Spirit Rider » Wed Feb 28, 2018 8:06 pm

You have just totally missed a fundamental tenant of the Boglehead philosophy.

"Past Performance Is Not Indicative Of Future Performance."

Lipper, Morningstar, etc... are measures of past performance. It does not matter if Vanguard is up one year or down another. It should be totally irrelevant to your IPS.

You will not find anything in the Boglehead philosophy about Lipper or Morningstar.

david1082b
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Re: Lipper awards: Vanguard the new victor

Post by david1082b » Wed Feb 28, 2018 9:15 pm

The performance by T. Rowe ends a two-year winning streak by American Funds, which had dominated the trophy count for its solid performance in target-date-fund categories
It seems it's all a bit random who the winner is each year. The article starts with talking about two different long-term bond funds, not very Bogleheadish, since Bogleheads prefer total bond market funds mostly.
In T. Rowe's case, 15 of its winners were in target-date-fund categories for 3-, 5-, and 10-year periods.

"This recognition is a testament to the strength of our global platform of portfolio managers and research analysts," said Rob Sharps, T. Rowe's group chief investment officer.
Or maybe you just got lucky?
For instance, the $1.5 billion Vanguard Long-Term Treasury Index Fund (VLGIV) won for the 3- and 5-year return of the general U.S. government funds category.
I think the proper ticker is VLGIX, which apparently is the institutional version, minimum investment $5 million. So I guess it outperformed the more affordable versions tracking the same index because its management fee is a bit lower, not very useful for the retail investor who doesn't have $5 million to blow on one fund. http://quotes.morningstar.com/chart/fun ... on?t=VLGIX

I don't see what a newb can get out of this, other than thinking that getting a long-term bond fund from Vanguard is a "good idea" and that T Rowe has the "best performing" target date funds (now that the American ones aren't so good apparently). A Target Date fund is a better thing to promote to newbs than long-term bond funds, but newbs might also think that they need to chase different fund providers based on recent performance.

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Ethelred
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Re: Lipper awards: Vanguard the new victor

Post by Ethelred » Thu Mar 01, 2018 8:28 am

Spirit Rider wrote:
Wed Feb 28, 2018 8:06 pm
You have just totally missed a fundamental tenant of the Boglehead philosophy.

"Past Performance Is Not Indicative Of Future Performance."

Lipper, Morningstar, etc... are measures of past performance. It does not matter if Vanguard is up one year or down another. It should be totally irrelevant to your IPS.

You will not find anything in the Boglehead philosophy about Lipper or Morningstar.
It is interesting, though. There's usually a few active funds that out-perform passive index funds over 5 or even 10 years, even if the majority under-perform, and no-one can predict the best performers ahead of time. And when you look through the list, most of Vanguard's category winners are either active funds too (e.g. PRIMECAP), or state-specific municipal bond funds. There is one exception: Vanguard mid-cap value admiral ranked first of 37 in its 5-year category.

The original list is here: http://lipperfundawards.com/Awards/Unit ... tates_2018
Last edited by Ethelred on Thu Mar 01, 2018 8:29 am, edited 1 time in total.

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Toons
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Re: Lipper awards: Vanguard the new victor

Post by Toons » Thu Mar 01, 2018 8:29 am

Costs DO matter.

:D
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Ethelred
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Re: Lipper awards: Vanguard the new victor

Post by Ethelred » Thu Mar 01, 2018 8:36 am

Toons wrote:
Thu Mar 01, 2018 8:29 am
Costs DO matter.

:D
Well, yes they do, but this is basically just a list of active funds. The ERs for PRIMECAP Admiral and Vanguard International Growth Admiral, two of the Vanguard winners, are both 0.32%. Probably cheaper than most of their direct competitors, but still not the sort of funds that would usually be recommended on Bogleheads. Oh, and PRIMECAP is closed to new investors.

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Toons
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Re: Lipper awards: Vanguard the new victor

Post by Toons » Thu Mar 01, 2018 8:48 am

Ethelred wrote:
Thu Mar 01, 2018 8:36 am
Toons wrote:
Thu Mar 01, 2018 8:29 am
Costs DO matter.

:D
Well, yes they do, but this is basically just a list of active funds. The ERs for PRIMECAP Admiral and Vanguard International Growth Admiral, two of the Vanguard winners, are both 0.32%. Probably cheaper than most of their direct competitors, but still not the sort of funds that would usually be recommended on Bogleheads. Oh, and PRIMECAP is closed to new investors.
You are correct.Managed funds not recommended.
I am invested in PrimeCap Core.
PRIMECAP Core Fund 0.46%
Average expense ratio of similar funds* 0.99%
Expenses do matter :mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

IlliniDave
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Re: Lipper awards: Vanguard the new victor

Post by IlliniDave » Thu Mar 01, 2018 8:55 am

Toons wrote:
Thu Mar 01, 2018 8:29 am
Costs DO matter.

:D
This. It's amazing how underrated/unappreciated Vanguard's fee structures and other cost-lowering measures are sometimes. It is the secret sauce that make index funds work for us long-haul investors.
Don't do something. Just stand there!

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