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Posted by pk on April 29, 2008, 7:33 am
I currently have shares in TRowe Price Small Cap (OTCFX) and it was
suggested that I sell them and get Lord Abbett Small Cap (LSRCX) since
it appears to be ( and will be) doing better over the long run.
How do I choose?
Thanks
pk
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Posted by Ed on April 29, 2008, 7:48 am
>I currently have shares in TRowe Price Small Cap (OTCFX) and it was
> suggested that I sell them and get Lord Abbett Small Cap (LSRCX) since
> it appears to be ( and will be) doing better over the long run.
>
> How do I choose?
>
> Thanks
> pk
LSRCX is the symbol for the C shares. I would never buy C shares because of
the expense ratio, 1.92%.
Unless you have access to this fund through a retitement plan or and advisor
the fund is closed.
OTCFX has not been a great performer so I'd look elsewhere for small caps.
Royce does a good job:
http://www.roycefunds.com/Funds/Prices/
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Posted by on April 29, 2008, 9:27 am
> >I currently have shares in TRowe Price Small Cap (OTCFX) and it was
> > suggested that I sell them and get Lord Abbett Small Cap (LSRCX) since
> > it appears to be ( and will be) doing better over the long run.
> > How do I choose?
The same way you normally choose funds. The biggest predictors
of long-term results are asset-class and expenses. For the most
part, any returns above that are going to go hand-in-hand with
higher risk-taking.
> LSRCX is the symbol for the C shares. I would never buy C shares because of
> the expense ratio, 1.92%.
C shares (as Ed knows) are just a way of hiding sales loads. The
broker who sells you this fund gets a whopping commission for
doing so. If you buy A shares, the load is right up front -
5.75%. The C shares, instead of charging you that load up front,
charge it to you 1%/yr. The A shares charge you 5.75% up front
and *still* hit you with a 0.3%/yr 12b-1 fee (load) *anyway*.
These are outrageously expensive and the manager had to take
that much more risk each year to overcome that cost that some
of his competitors don't have to overcome.
History makes this look like a good bet - he's actually beaten
most of his peers for the last 5-10 years. But, as they say
in the industry, past performance is not a guarantee of future
returns. The only thing that can be guaranteed is that you will
keep paying high fees each year with this fund.
If a broker really thought this was the best fund *and* had
your best interests at heart, you'd be talking about getting
the A shares, not the C shares, and you'd be waiving the
5.75% load and, at most, paying some simple flat transaction fee.
I'd be wary.
> OTCFX has not been a great performer so I'd look elsewhere for small caps.
> Royce does a good job:
> http://www.roycefunds.com/Funds/Prices/
--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting
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Posted by dumbstruck on April 30, 2008, 6:10 am
On Apr 29, 3:27=A0am, BreadWithS...@fractious.net wrote:
> > LSRCX is the symbol for the C shares. I would never buy C shares because=
of
> > the expense ratio, 1.92%.
>
> C shares (as Ed knows) are just a way of hiding sales loads. =A0The
> broker who sells you this fund gets a whopping commission for
> doing so. =A0If you buy A shares, the load is right up front -
> 5.75%. =A0The C shares, instead of charging you that load up front,
> charge it to you 1%/yr. =A0The A shares charge you 5.75% up front
> and *still* hit you with a 0.3%/yr 12b-1 fee (load) *anyway*.
No, C shares are better than A shares. You may have to cut and run,
and don't want to have to hold on to A shares to justify that high
frontload. Life has surprises, so keep flexible. Don't want to cling
on to a bubble that never recovers like Japan or Tech. Of course
prefer no load, but one of the few reasons you go into funds instead
of low expense ETFs is that funds have some very hard to find
strategies, sometimes only with load. Until recently Etrade would kick
back some of the yearly fees, sometimes amounting to hundreds of
dollars.
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Posted by on April 30, 2008, 12:13 pm
> On Apr 29, 3:27 am, BreadWithS...@fractious.net wrote:
> > > LSRCX is the symbol for the C shares. I would never buy C shares because of
> > > the expense ratio, 1.92%.
> >
> > C shares (as Ed knows) are just a way of hiding sales loads. The
> > broker who sells you this fund gets a whopping commission for
> No, C shares are better than A shares. You may have to cut and run,
> and don't want to have to hold on to A shares to justify that high
> frontload. Life has surprises, so keep flexible. Don't want to cling
If you're worried about having "to cut and run" then you shouldn't
be buying either of these funds at all.
--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting
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