I currently have both an EJ Advisory portfolio (since 2009), and a Vanguard PAS portfolio (since 2015). I've read a lot on this forum and others about the down sides of the EJ model, but have never gotten around to moving everything to Vanguard. That said, no additional funds have been added to EJ since 2015, but I invest $2k / month into the Vanguard portfolio. 2/3rds of total assets across both are on the Vanguard side. Both portfolios have a similar 80/20 asset mix. Both have about 25% international. EJ is all taxable, while 5% of the Vanguard portfolio is in a Roth. EJ charges me 1%, Vanguard PAS 0.3%.
Today I learned about PortfolioVisualizer.com's historical analyzer, and so I decided to put the 2 portfolios side by side going back to 2009, to see how they both performed. I used the same initial investment, and modeled a $1k monthly contribution, re-balancing annually.
The results surprised me, which is why I decided to share them here and see if I'm thinking about things wrong. Even after I take out the adviser fees on both sides, the EJ account still outperformed the vanguard one. I know past performance doesn't predict future, but is there something I'm missing in my analysis? I'm not including tax benefits, but would that really make that much difference? (My marginal tax rate is 39.6%). It seems to me that the EJ account is performing just fine sitting where it is.
Details below:
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Initial Balance Final Balance CAGR IRR Stdev Best Year Worst Year
EJ: $100,000 $373,516 18.53% 10.84% 10.79% 27.16% -2.05%
Vanguard: $100,000 $342,090 17.20% 9.31% 10.67% 21.16% -2.97%
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Annual Returns:
2010: EJ 15.05% Vanguard: 13.1%
2011: EJ -2.05% Vanguard: -2.97%
2012: EJ 17.1% Vanguard: 15%
2013: EJ 27.16% Vanguard: 21.16%
2014: EJ 5.69% Vanguard 5.73%
2015: EJ 0% Vanguard -0.93%
2016: EJ 7.76% Vanguard 8.01%
2017: EJ 15.97% Vanguard 14.52%
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Holdings
EJ:
Fund Name Symbol ER Holding %
AMERICAN EUROPACIFIC GROWTH CL F3 FEUPX 0.51% 5.24%
AMERICAN FUNDAMENTAL INVESTORS CL F3 FUNFX 0.32% 6.11%
BARON SMALL CAP FUND INSTITUTIONAL CL BSFIX 1.06% 4.15%
DELAWARE US GROWTH FUND CL I DEUIX 0.80% 5.40%
DFA US SMALL CAP VALUE FUND DFSVX 0.52% 3.09%
DODGE & COX INCOME FUND DODIX 0.43% 6.77%
DODGE & COX STOCK FUND DODGX 0.52% 5.06%
FRANKLIN MUTUAL GLOBAL DISCOVERY FUND CL Z MDISX 0.99% 5.86%
HARBOR CAPITAL APPRECIATION FUND INSTITUTIONAL CLASS HACAX 0.70% 5.31%
HOTCHKIS & WILEY MID CAP VALUE FUND CL I HWMIX 1.03% 1.91%
INVESCO COMSTOCK CL R6 ICSFX 0.41% 4.15%
JPMORGAN CORE BOND FUND CL R6 JCBUX 0.41% 7.73%
METROPOLITAN WEST FUNDS TOTAL RETURN BOND FUND CL I MWTIX 0.44% 2.89%
MFS VALUE FUND CLASS R6 MEIKX 0.51% 6.13%
OAKMARK INTERNATIONAL CL I OANIX 0.86% 6.27%
OPPENHEIMER INTERNATIONAL GROW FUND CL I SHARES OIGIX 0.70% 6.11%
PRIMECAP ODYSSEY STOCK FUND POSKX 0.69% 3.12%
T ROWE PRICE INSTITUTIONAL LARGE CAP GROWTH FUND TRLGX 0.56% 3.21%
T ROWE PRICE INTERNATIONAL DISCOVERY FUND CL I TIDDX 1.08% 3.21%
VICTORY MUNDER MID CAP CORE GROWTH FUND CL Y MGOYX 1.06% 8.27%
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Vanguard:
Type Fund Name Symbol ER Holdings%
ROTH Vanguard Total Bond Market Index Fund Admiral Shares VBTLX 0.05% 3%
ROTH Vanguard Total International Bond Index Fund Admiral Shares VTABX 0.12% 1%
ROTH Vanguard Total International Stock Index Fund Admiral Shares VTIAX 0.11% 1%
Taxable Vanguard Total International Stock Index Fund Admiral Shares VTIAX 0.11% 32%
Taxable Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares VWIUX 0.09% 6%
Taxable Vanguard Limited-Term Tax-Exempt Fund Admiral Shares VMLUX 0.09% 4%
Taxable Vanguard Long-Term Tax-Exempt Fund Admiral Shares VWLUX 0.09% 5%
Taxable Vanguard Extended Market Index Fund Admiral Shares VEXAX 0.08% 13%
Taxable Vanguard 500 Index Fund Admiral Shares VFIAX 0.04% 36%