Performance of active funds vs ETFs

Discussion in 'Share Investing Strategies, Theories & Education' started by Omnidragon, 9th Apr, 2020.

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  1. Omnidragon

    Omnidragon Well-Known Member

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    {Note from mods - this thread split from here: Exchange Traded Funds (ETFs) 2020 [ETF]}


    I’m not really convinced it’s that ‘smart’ I must say. If you bought the index for no fees any time in the last 6 years, you’d probably be underwater (unless you bought at Dec 15-Jan 16). I mean would it be that different buying after a crash in terms of outperformance? You’re just buying a bunch of financial institutions and miners (plus CSL and Wesfarmers) at a dip, as opposed to picking something you absolutely think has a lot of potential but has been smashed, or just dirt cheap (bc banks are not dirt cheap).
     
    Last edited by a moderator: 12th Apr, 2020
  2. dunno

    dunno Well-Known Member

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    Some people pick the index because they do not have the same level of intelligence and understanding as you.
     
  3. Omnidragon

    Omnidragon Well-Known Member

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    Oh I’m not that intelligent, if I were I wouldn’t have bought some of my crappy resi properties. But just saying, the track record of the ASX index is most people who bought last 5-6 years wouldn’t have made money let alone outperformed.
     
  4. dunno

    dunno Well-Known Member

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    Did you assume that I was suggesting you were?
     
  5. Omnidragon

    Omnidragon Well-Known Member

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    Oh “as you” must’ve been directed at invisible man, or a subtle suggestion that losing money over 6 years is a great investment for intelligent people
     
  6. dunno

    dunno Well-Known Member

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    Hmmmm

    Your assumptions and comprehension seem to be contradictory. I was referring to you, however I didn't say anything about your level of intelligence, just that others at a different level may choose indexing due to what they understand.

    Whilst the power of indexing over time is relatively simple. Explaning it to some is often futile.
     
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  7. Omnidragon

    Omnidragon Well-Known Member

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    Yea if someone is 67 now, and they had been averaging into this index last 6 years, they’d be having some problems now.

    The earlier gains may make up for it, but with the index back at 2007-08 levels (albeit above 2009-2013), it’d be interesting to see an IRR calculation of average contributions every month from 2006 to now for example. And I wonder if the IRR would change that much even if stretched to 2000, given the time value of money.
     
  8. dunno

    dunno Well-Known Member

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    50/50 portfolio VGS/VAS since inception of VGS in NOV 2014. 10K invested each month.

    upload_2020-4-9_22-2-29.png
     
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  9. dunno

    dunno Well-Known Member

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    Just saw your edit.

    Using the managed funds that underlie the index ETF's and going back to their inception in July 1997. 10K per month. 50/50 VAS\VGS equivalent split

    upload_2020-4-9_22-12-32.png
     

    Attached Files:

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  10. Omnidragon

    Omnidragon Well-Known Member

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    What’s that as an IRR roughly? Includes reinvestment I assume.
     
  11. Nodrog

    Nodrog Well-Known Member

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    LOL:D. @dunno your tactfulness cracks me up at times:D:D.

    VAS / VGS, what a combination. It has worked perfectly as expected in the current mess. What a great core (or enough in itself) for any Aussie portfolio for the vast majority of us “know nothing” investors:cool:!
     
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  12. Omnidragon

    Omnidragon Well-Known Member

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    Lol well I’m glad it’s worked for you. I’m happy with my 40% gain in my fund last year and 8% loss first quarter this year :)

    Post fees of course. I know which one I’ll be topping up in
     
    Last edited: 9th Apr, 2020
  13. Nodrog

    Nodrog Well-Known Member

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    Well done. In my case too lazy, too stupid, too nervy and have enough invested now where accepting average is all that’s needed to meet our needs and more.
     
  14. dunno

    dunno Well-Known Member

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    Worked out terribly for me, down at least 10Mil just last month. Please email me your fund details at [email protected].
     
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  15. Omnidragon

    Omnidragon Well-Known Member

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    Why so upset? I’m sorry not every active fund underperforms the index. You still didn’t tell me the IRR lol
     
  16. dunno

    dunno Well-Known Member

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    It's about 6.5% CAGR for the second chart.

    You misinterpret sarcasm for upset.
    Most people on this thread understand that creating real wealth requires the capacity to suffer as you stay a two step forward, one step back course.

    Defying the odds and only having to tread a favourable path as promoted by so many internet forum gurus belongs in other threads.
     
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  17. Omnidragon

    Omnidragon Well-Known Member

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    Yea ok. I was more interested in the CAGR/IRR. That’s surprisingly low. Must’ve excluded dividends I assume so more like 9-10%
     
  18. Ross36

    Ross36 Well-Known Member

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    This could all be resolved if you provide something like audited 5yr returns for the portfolio. Feel free to anonymise anything identifiable. Otherwise it is hard to believe someone outperformed the market by that much without high leverage during a boom and correction. Statistics just don't allow that to happen. You may be the 1 in a hundred guru though. Or just show an anonymised payslip from Renaissance!
     
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  19. SatayKing

    SatayKing Well-Known Member

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    It is still all about ME!
    I'm more bemused a misinterpretation of an article can result in vigorous discussion.
     
  20. Anne11

    Anne11 Well-Known Member

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    Can we please discuss chicken breasts
    price instead? :)

    It is hard to be famous anonimously.
     
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