VTWSX vs MGGPX which one better?

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inkball
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Joined: Mon Sep 10, 2018 11:54 pm

VTWSX vs MGGPX which one better?

Post by inkball » Tue Sep 11, 2018 12:05 am

Someone suggested Morgan Stanley Institutional Fund, Inc. Global Opportunity Portfolio Class A MGGPX
I looked at and it is a Front Loaded fund (5.25%) with Expense Ratio: 1.32%

Despite all these costs it is outperforming VTWSX & SP500. It appears like it is diversified too.

What is the catch? is it going to give less due to Front load. I did backtesting and MGGPX is still outperforming.

Am I missing something? Is it just fluke or this fund is truly performing well?
Thank you for your input.

retiredjg
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Joined: Thu Jan 10, 2008 12:56 pm

Re: VTWSX vs MGGPX which one better?

Post by retiredjg » Tue Sep 11, 2018 6:14 am

Hardly an apples to apples comparison. The funds are not very similar.

My guess is the outperformance is a result of the much greater risk the Global fund has. And while it might be "diversified", a very large portion (29%) of the fund is in only 5 different stocks - this is very different from an index fund. And very risky.

Buying this fund would simply be "chasing performance" which is not a very sound investment strategy.

Welcome to the forum.

rkhusky
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Joined: Thu Aug 18, 2011 8:09 pm

Re: VTWSX vs MGGPX which one better?

Post by rkhusky » Tue Sep 11, 2018 6:28 am

According to Morningstar MGGPX has 36 stock holdings and 16 other holdings (not sure what these are). VTWSX (Total World) has 7,987 stock holdings and 70 other holdings.

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dwickenh
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Location: Illinois

Re: VTWSX vs MGGPX which one better?

Post by dwickenh » Tue Sep 11, 2018 6:31 am

Most Growth funds have been hot as growth has beaten value stocks for a decade. No one knows if this will persist, but the past would dictate a reversion to mean that would even the playing field for value. You might be jumping in at the "top" for growth stocks, or not. It is a concentrated bet at best and not what Bogleheads would recommend.

retiredjg got it right, not comparable.
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

inkball
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Joined: Mon Sep 10, 2018 11:54 pm

Re: VTWSX vs MGGPX which one better?

Post by inkball » Fri Sep 14, 2018 1:05 am

Thank you for your input. Really appreciated.

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