| 401K fund has high expense ratio |
|
|
|
|
|
giacona
Member
Cash: $ 4.90
Posts: 21
Joined: 22 Jun 2012
|
| 401K fund has high expense ratio |
 |
|
My 401k has normally funds with low expense ratios usually under 1 %. I was going some research and found I have one fund that charges a 1.33% ratio. I love the fund and it performs rather well. It has a lifetime performance of just under 14%. Would it worth keeping this even tho it has a high expense ratio?
|
Sat Apr 20, 2013 1:59 pm |
|
|
oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
|
quote:
It has a lifetime performance of just under 14%. Would it worth keeping this even tho it has a high expense ratio?
Depends on the fund. You have to decide if your fund has the right amount of risk to meet your goals. And look into "lifetime". Eg, the generic US market has earned about 20%/yr for the last 4 yrs - so if the lifetime of your fund is 4 yrs, 14% would be underperforming. Or, if your fund is high yield bonds (aka junk bonds) they often pay 14% right up to their bk. What is that fund invested in?
|
|
Sat Apr 20, 2013 3:37 pm |
|
|
giacona
Member
Cash: $ 4.90
Posts: 21
Joined: 22 Jun 2012
|
Maybe I should have included the fund information in my original post. Anyhow the symbol is "ARTMX" and it's the Artisan Mid Cap.
|
|
Sun Apr 21, 2013 1:53 pm |
|
|
oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
|
Yes, it's worth keeping - but in moderation. It is a MidCap managed fund, for the past 10 years it has averaged 11.5%/yr, that is about 3% more than the generic US market (SP500). So the 1.33% cost for the manager has paid off.
It is mid cap so it carries more risk than the large cap market - you have to factor in the risk when you decide how much of your portfolio should be ARTMX.
As always - risk and return are directly proportional - you have to selct the risk level that you like.
|
|
Sun Apr 21, 2013 5:13 pm |
|
|
|
