Mutual fund performance this year?
 

I have a friend who's mutual fund account went from $100,022.50 to $87,270.38 in 2019.

A loss of $12,752.12.

From the statement looks like stocks are grouped into three categories - all Invesco Oppenheimer Rochester acquired in 2008.

I'm not very well versed in the stock market other than what I hear in the news in general terms.

Seems like my friend's account should be increasing given the positive direction of the market.

I did go back to these two threads:

http://forums.pelicanparts.com/off-topic-discussions/1020645-financial-advisor.html

http://forums.pelicanparts.com/off-topic-discussions/1041465-learning-invest.html

....but also wanted to drill down on this specific situation for input from the brain trust here.

Thanks!

Did they withdraw funds on Jan 2nd in the amount of about $30K ?

That "loss" makes no sense...

Muni tax free? It should be up. I am with MBA. Wirhdrawal?

https://www.invesco.com/us/financial-products/mutual-funds/product-detail?fundId=31989

I've got a very diverse mix of mutual funds that gained 24.85% from 01-01-19 to 12-31-19

I suspect everyone else had similar returns.

You would have had to try very hard to lose money last year.

That's entirely too general of a question. Too many variables at play.

Sure, mine are cruising along nicely, but the term "mutual fund" is getting bastardized quite a bit over the last few years.

I'd have them go to https://www.daveramsey.com/smartvestor?int_cmpgn=no_campaign&int_dept=elp_bu& int_lctn=Homepage-Buckets&int_fmt=button&int_dscpn=HP_Bucket_2_SV_12 2619

Find one that's local, have a meeting. Costs nothing to just talk it out.

If your question is about learning what MF are and how they work, go there as well.

Highly recommended.

Maybe I'm not reading the statement correctly?

http://forums.pelicanparts.com/uploa...1581695069.jpg

It's all about timing, take a look at the fund when they bought it (2008) and where it is now. It took a HUUUUUUUUUGE dump in 2008 right after they bought it and never fully recovered. it's been doing OK for the past 2 years but before that it totally sucked.

There are a go-zillion different mutual funds out there, most do well. Some do not.These are tax-free municipal bond funds, extremely conservative to a fault.
Is your neighbor managing this for themselves? If so, I suggest they consult a pro.

If they are working with a pro and this is the result, they need a better advisor.
Heck, I could do better than that and I know nuthin.

http://forums.pelicanparts.com/uploa...1581695852.jpg

Doesnt that say it was acquired in 2008? Wouldn't the "original cost" be from 2008?

A quick check of the first fund, OPTAX, shows it went up ~12% last year

Damn you Sammy. I was about to post the exact info but from Yahoo.

It is a load tax free muni bought just before the crash. My chart is the high yield fund

https://finance.yahoo.com/quote/ORNAX/

Here's the part I really don't like (bedsides the turnover rate):

Expenses & Fees Expenses & Fees Additional Information
Exp Ratio (Gross) 1.19%
($11.90 per $1000)

Exp Ratio (Net) 1.19%
($11.90 per $1000)

Distribution and/or service fee(12b-1) Fees 0.25%

Loads
Front End Load 4.25%

On a bond fund. A huge part of return is going to fees.

Holy crap....1.9% fees to lose 12.8% on the year. I am self managed in PLCGX, and made 29.8% in 2019 (it would have been a few points higher, except for a brain fart of mine in October).

With this same account, I am up 7.98% YTD in 2020.....this adviser should be shot for negligence, how can you lose money in this economy ?

Even a trained monkey could have picked positive stocks the last two years. A LOSS? Wow. and 1.9% fees? Way high.

The fund was up in 2019. The loss is due to buying just before the 2008 crash.

I am sorry but your friend got screwed. Read sammy's other posts - Vanguard & Fidelity & others offer good bond funds and will not screw him with fees.

Besides the load, the exp. ratio is high for a bond fund. It would be fine for an actively managed foreign stock fund...

Hang on, it's not as bad as it looks:

It's worth noting that those funds pay a big distribution. A quick check on Yahoo Finance suggests that including the distributions, your friend's total return is likely closer to 100% (i. e., around a double on initial investment) since the original investment date.

I agree with others, however, that the management fees on those funds are high.

Thanks for all the replies so far.

Municipal bonds weren't too hot last year... How close is this person to retirement? I have 20 years more at least and have almost nothing in bonds.

I would expect a return more like this one (index fund). 10-12% per year on the average...even including 2008. Time/Long term is your friend.

http://forums.pelicanparts.com/uploa...1581728574.JPG

You are showing a stock chart and the investment was in a tax free muni. We don't know what he was looking for. He might have wanted income. He might have used it for his bond part of the portfolio and he had 95% already in stocks. We don't know his age or current income. We don't know his risk tolerance. Too many unanswered questions to determine if a bond fund was the right move. I don't like the choice due to expenses and his timing might not have been the best. On the other hand he might have sold off a bunch of stock at a large profit prior to the crash and put it into a bond fund to limit risk.

yes, we don't know if a bond fund was the right move


we do know that this bond fund was a wrong move

most people should never worry about timing the market (if you do try to time the market do it with OPM and charge well - and do not base the charge on your performance...)

Isn't that what I said?

I do agree that trying to time the market is a mistake. Taking profits after a big run up is not.

Whatever he was looking for...he would have been off to better to look here.

About what a no load total market fund yielded...

Those are muni bond funds. Most of you are comparing their performance to equity (stock) funds. Apples and oranges.

Not clear that they actually declined in value last year. They have declined in value since they were purchased.

The management fees are too high, for a bond fund.

He could sell these funds, realize a tax loss to offset some other taxable income (consult accountant) and replace with a different muni bond fund(s) if that is the asset class he wants to own. Or with something else.

Yep
Yep
Yep
And yep

It's not really a loss unless he surrenders the bonds, till then it's just a drop in value. It could recover.