American Funds vs others

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Jan 26, 2010 3:25 pm
Squash1:

I hate franklin… Their int’l funds are terrible, that Founding fund allocation is a joke…

  Not sure I agree.  Their emerging markets funds are well managed.  Their Mutual Series funds are very good (though I generally only use Mutual Discovery, which is global), their fixed income at Franklin is one of the best lineups in the industry, next to maybe PIMCO, and Templeton Global Bond (IMO) is among the top 2 or 3 global bond funds out there.   And there are plenty of great fund companies out there with some terrible funds.  Franklin is one of them.  That's why I use maybe 6-8 of their funds, max (out of like 50).  And really I only generally use 5 most of the time.   When I have to use 1 fund family (which I rarely do anymore), they would be my choice.
Jan 26, 2010 3:40 pm

Founding Funds Allocation is definitely a joke, but I like the rest of their lineup. They are one of the few fund families where you can create a fully diversified portfolio using just their funds. B24 turned me on to Mutual Global Discovery last summer and I use Global Bond in 95% of the accounts I open. I don’t mind their Asset Allocation funds either for smaller accounts.

Jan 27, 2010 1:58 am

I consider Discovery a poor man’s First Eagle… Why would you even buy Discovery when the fund manager left last year?

Jan 27, 2010 4:36 am
SometimesNowhere:

Some of the greatest funds available rarely get any discussion here, and you will see A TON of portfolios, even larger ones (by EDJ standards) with only like 4-5 American Funds in them. In fact, I had a client come in the other day that wanted to move their account from another Jones branch out of state that had $250k with like $80k in AIVSX, and another $40k in some other fund that looked a lot like it (I don’t remember which one). All in all, almost 80% of their account was in some mix of similar American Funds. Ridiculous…

  I share a client with the local Jones rep.  They have about $1.3mm in Am Funds, and I believe there are only 5 funds in the portfolio.  Their total investment portfolio is about $2.5mm.
Jan 27, 2010 4:54 am

[quote=Squash1]I consider Discovery a poor man’s First Eagle… Why would you even buy Discovery when the fund manager left last year?

[/quote]   The manager leaving isn't a good thing, but the replacements have a long history with the Mutual Series funds. Its not like they just found a couple of chumps who just fell off a fidelity truck.
Jan 27, 2010 3:44 pm
EDJ4now:

[quote=SometimesNowhere]Some of the greatest funds available rarely get any discussion here, and you will see A TON of portfolios, even larger ones (by EDJ standards) with only like 4-5 American Funds in them. In fact, I had a client come in the other day that wanted to move their account from another Jones branch out of state that had $250k with like $80k in AIVSX, and another $40k in some other fund that looked a lot like it (I don’t remember which one). All in all, almost 80% of their account was in some mix of similar American Funds. Ridiculous…

  I share a client with the local Jones rep.  They have about $1.3mm in Am Funds, and I believe there are only 5 funds in the portfolio.  Their total investment portfolio is about $2.5mm.[/quote]   Terrible. Please take that client. Please.   Although soon that client will be in Advisory Solutions.
Jan 27, 2010 3:45 pm

[quote=Squash1]I consider Discovery a poor man’s First Eagle… Why would you even buy Discovery when the fund manager left last year?

[/quote]   Did I say I bought Discovery after the manager left?  Hmmmm.   They had a great track record even before they were there.  They are very defensive, and it's a good equity fund for conservative people.  But I agree, I prefer First Eagle.  However, First eagle has the same manager issue.  It will be interesting to see what happens with both funds over the next few years.  I watch both very closely.
Jan 27, 2010 8:23 pm

[quote=B24][quote=Squash1]I consider Discovery a poor man’s First Eagle… Why would you even buy Discovery when the fund manager left last year?

[/quote]   Did I say I bought Discovery after the manager left?  Hmmmm.   They had a great track record even before they were there.  They are very defensive, and it's a good equity fund for conservative people.  But I agree, I prefer First Eagle.  However, First eagle has the same manager issue.  It will be interesting to see what happens with both funds over the next few years.  I watch both very closely.[/quote]   Actually, First Eagle Global just brought back their "premier" manager after a short retirement.   That fund kicks ass!
Jan 27, 2010 10:53 pm

HKA,



I think you’re history is a little dated. JME left a few years ago, then came back when his replacement departed abruptly. He has now left again, although they still list him as some sort of “consultant”, but for all intents and purposes, he is gone.

Jan 27, 2010 11:43 pm
B24:

HKA,

I think you’re history is a little dated. JME left a few years ago, then came back when his replacement departed abruptly. He has now left again, although they still list him as some sort of “consultant”, but for all intents and purposes, he is gone.

  He is still a Senior Consultant for the next three years...Hopefully he will teach the new guys what he knows because it has been a great fund.
Jan 28, 2010 1:49 am
Hey Kool-Aid:

[quote=B24]HKA,

I think you’re history is a little dated. JME left a few years ago, then came back when his replacement departed abruptly. He has now left again, although they still list him as some sort of “consultant”, but for all intents and purposes, he is gone.

  He is still a Senior Consultant for the next three years...Hopefully he will teach the new guys what he knows because it has been a great fund.[/quote]   I agree, I am not worried.  Not because he is hanging around (in name only, for PR purposes), but because of the process and philosophy he established over 30 years.  Not sure how you continue that for the next 30 years, but time will tell.  In the short-term, I am onboard with them.
Feb 1, 2010 7:12 am

This is an active strategy.They actively design the criteria for their
proprietary index and then “passively” let the index they created work.
It’s a way of getting people who like active management and people who
prefer passive management to both want to buy into DFA.DFA funds, especially their specialty international small and/or
value ones, are some of the only passive mutual funds in their sectors
and they are quite reasonable in terms of their fees.

Feb 2, 2010 2:40 pm

[quote=SometimesNowhere] [quote=B24]

I like certain funds from: Franklin Templeton (Franklin for fixed income, Mutual Series for deep value global equity, Templeton for Global Fixed Income and Emerging Markets Equity) PIMCO/Allianz (for fixed income only) First Eagle (Global) IVY (Asset Strategy) and a few others for specific niches.  I will use certain American Funds on occasion, but primarily just their international focused funds.  And I actually like Fundamental Investors for Large cap domestic, but I honestly don't use it much anymore.   MFS Global Total Return (one of your fund families) is a pretty good core fund.[/quote]

X2. Weird B, you and I think a lot alike with fund selection. You and I must be the only two guys in the firm that sell some of those families.

For what it's worth, some clients love when you tell the Pimco story to them, especially if they are the type that watch CNBC all the time. One of the few times you don't have to roll your eyes when they mention something they saw there.

As for American Funds, I have always sort of felt that they have like 4 equity funds, just under 20 different names. I don't understand why they don't just consolidate half of their funds, they are all the same anyway. Then they could spend some money on some wholesalers or something.
[/quote]

If they only offered 4 funds, EJ would only sell 4 funds.

Feb 3, 2010 2:54 am

[quote=Squash1]I hate franklin… Their int’l funds are terrible, that Founding fund allocation is a joke…[/quote]

When you say their intl funds are horrible, are you throwing in global in that mix as well? Templeton Growth has an awesome track record and I think the oldest global fund in the US. 

Feb 3, 2010 2:58 am
EDJ4now:

[quote=SometimesNowhere]Some of the greatest funds available rarely get any discussion here, and you will see A TON of portfolios, even larger ones (by EDJ standards) with only like 4-5 American Funds in them. In fact, I had a client come in the other day that wanted to move their account from another Jones branch out of state that had $250k with like $80k in AIVSX, and another $40k in some other fund that looked a lot like it (I don’t remember which one). All in all, almost 80% of their account was in some mix of similar American Funds. Ridiculous…

  I share a client with the local Jones rep.  They have about $1.3mm in Am Funds, and I believe there are only 5 funds in the portfolio.  Their total investment portfolio is about $2.5mm.[/quote]

That's horrible.  When clients have that kind of account size, they need to have some SMA's in there as well. 
Jun 24, 2010 2:22 am

[quote=Squash1]I consider Discovery a poor man's First Eagle... Why would you even buy Discovery when the fund manager left last year?

[/quote]

That's a great point and could cause concern when choosing funds. 

But for Mutual Global Discovery, i'm not worried.  The PM Anne Gudefin was replaced by Peter Langerman, who helped Max Heine start the Mutual Series fund family and was one of the original PMs on the Mutual Global Discovery fund prior to Anne.  None of the team's analysts have left.

i believe the fund will continue to do well.  Great downside protection and like the merger arbitrage specialty.

Jun 24, 2010 2:38 am

[quote=B24][quote=Squash1]I hate franklin.... Their int'l funds are terrible, that Founding fund allocation is a joke...[/quote]

 Not sure I agree.  Their emerging markets funds are well managed.  Their Mutual Series funds are very good (though I generally only use Mutual Discovery, which is global), their fixed income at Franklin is one of the best lineups in the industry, next to maybe PIMCO, and Templeton Global Bond (IMO) is among the top 2 or 3 global bond funds out there. And there are plenty of great fund companies out there with some terrible funds.  Franklin is one of them.  That's why I use maybe 6-8 of their funds, max (out of like 50).  And really I only generally use 5 most of the time. When I have to use 1 fund family (which I rarely do anymore), they would be my choice.

[/quote]

Franklin Templeton is one of my favorite families.  Every fund family has pros and cons, strong and weak funds, but when you put it all together, Franklin's one of the winners . 

 - Over 50 years of solid history, great name that my clts know and trust, 3 fund families to choose from with lots of sector options, low overlap.  I think FTranked #1 for the 10 yr ret in Barron's 2009. I also get great support.

My favs:

- Franklin Growth (one of the oldest large cap gr funds - 1st quartile for the 1, 3, 5, 10 yr), Franklin Income, Mutual Global Discovery, Templeton Global Bond (#1 global bond fund period), Mutual European, Fr Int'l Sm Cap Growth, Templeton Frontier Markets, and of course the tax-frees