Contact Information

About us

Disclosure form

Minimum Investments

Client Agreement

Articles of Interest

Links to the Web

Selected Essays of Robert Doggett:

Elvis Slept Here

Among The Hang Gliders

Mean Kids

The Headmaster

Writ In Water

Letters and Commentary:

Barron's Letter 7/26/2004

Fiction by Robert Doggett:



Letter to Barron’s, 7/26/2004

To the Editor:

If loads and fees were deducted from the annualized performance listed for the American Funds in the table accompanying the July 12, 2004 mutual fund article “Big Wheels,” the only one that would have outperformed the S&P 500 benchmark over the previous ten-year period is The Growth Fund of America. The Only One. Even the second-place American Funds Washington Mutual Investors, with its 13.16% annualized ten-year performance, failed to outperform the S&P. Curiously enough, a case could be made for the American Funds Balanced Fund over that period. Of course it was helped by a bull market in bonds over the last few years, but I find it very impressive that a fund with 30% in bonds was able to come as close to matching the S&P over that time. Indeed, that Holy Grail of low volatility combined with excellent returns was one of the advantages of this group of funds writer Lawrence Strauss referred to in the article.

Whether in the end it was prudent for the average investor to pay a 5.75% front-end load, thereby enriching American Funds, along with his or her broker or financial adviser, for that sort of asset allocation, or whether it is really worth it for an investor to pay similar fees to American Funds’ Income Fund of America to invest in stocks like SBC, General Motors, and J.P. Morgan Chase, is best left for another discussion.

 Robert Doggett
Polaris Asset Management
Seattle, Washington

Lawrence Strauss replies: Returns shown were net of fees, but the industry convention is not to deduct sales loads [from performance calculations]. There’s certainly room for debate on that issue.

  Copyright Polaris Asset Management 2000 -