0
Sign InDiscuss
Follow
M
Dec 24 2020
Mid-cap fund
Iam thinking of adding MACGX to my ira rollover ( my portfolio is light on mid-cap funds ) but the front-end load is steep at 5.25% for 0 to 24,999 I’m thinking of investing 30k which would be 4.75% for investments of 25k to 49,999 . Any thoughts/input would help . Thanx in advance . Just found out if I buy through fidelity the load charge is waived but there is an ongoing 1% fee. But look at the returns on this fund ..smh !
1
Reply
+ Emoji
Dec 24 2020
Good question! The fund has stellar returns--on a 5-year basis you're looking at 20%+ return. But past performance is just one data point--and I personally don't like to choose funds just based on past performance.
You're right that the expense ratio is high (0.99%). The fund is actively managed and the top 10 holdings amount to almost half of the fund. If you believe in stocks such as Spotify, Zoom, Coupa, maybe this fund is the right fit.
I also checked out the Comparables tool and found out there are cheaper mid-cap growth funds, like Vanguard VMGMX, but this fund has performed significantly below MACGX.
Here is the comparison of the 2 funds.
IMO MACGX is right for someone who believes in active management and likes those mid-cap growth stocks mentioned above. Also, bear in mind tax consequences--the turnover is 65%.
4
Reply
+ Emoji
M
Dec 24 2020
@Milan852 Does the fact that this is going into an IRA rollover offset the tax consequences ? Btw I do have VMGMX in my portfolio just not that much .
Reply
+ Emoji
M
Dec 24 2020
@Milan852 Hmmm I’m a little confused ? 65 % turnover is ; they are trying to time the market, correct ?
Reply
+ Emoji
Dec 24 2020
@Mark225 Sales and purchases of mutual funds and ETFs (or any other securities) that are made within an individual retirement account are not taxable. So you won't accrue any capital gain taxes for selling 10k of this fund next year, regardless of the performance of the fund, if you don't withdraw from it. You will, however, pay taxes when you decide to withdraw from your rollover IRA (in which case you'll an ordinary income tax).
1
Reply
+ Emoji
M
Dec 24 2020
@Milan852 Thank you for taking the time to explain . I am going to take the dive .
1
Reply
+ Emoji
A
Dec 24 2020
@Mark225 Yes they are, they are taking an active bet on what they consider worthy of holding in their portfolio. That's also why almost 50% of their fund is made up of only 10 names. You kinda have to take a concentrated view to get a return like that!
1
Reply
+ Emoji
Dec 24 2020
@Mark225 You're welcome. I hope the fund continues to perform well--this can be tricky particularly with actively managed funds.
1
Reply
+ Emoji
M
Dec 24 2020
@Milan852 In oct. 2008 I invested 50k in the Curian Capital SMA (separately managed acct. ) I chose 7 out of 10 for aggressiveness by Jan. 2015 I had pulled 33k in gains out to pay down credit cards, mortgages, car payments and school loans and still had my 50k . my financial advisor was scratching his head . Guess I was just lucky .
1
Reply
+ Emoji
Dec 24 2020
@Mark225 Your timing was perfect. If you invested at the bottom of the market in 2008 into S&P 500, by now you would've had 4x that... but most people were scared back in 2008, and many of those who had the money, they kept it in cash.
1
Reply
+ Emoji
J
Dec 24 2020
Imo that's high. I'm a low-cost index investor so I'm one to avoid such fees, despite any strong past performance like MACGX has had. I checked out the returns and you're right. Stellar returns. In fact, similar to ARKK but the 2 funds use different strategies so it's not apples to apples.
If it were me, I'd look to a low-cost index fund that covers the mid-cap growth sector like IWP. But, if you're adding MACGX because you believe in mid-cap growth and perfer an active fund with some concentration in holdings, may not be a bad choice. I'd definitely look at comparables to see how they differ. I guess 1% for an active fund isn't all that bad, esp if Fidelity is going to waive the front-end load.
2
Reply
+ Emoji
M
Dec 24 2020
@Jan274 I have done well with another actively managed fund (Curian Capitals sma ) . Sadly closed now !
Yes, Fidelity is waiving the front-end load ! So I would of had to pay $1,410. To invest 30k . The 1% fee : you have to spend money to make money sometimes . I have all intentions to stick not sell . Thank you for the input .
Reply
+ Emoji
J
Dec 24 2020
@Mark225 It's good that Fidelity will waive it. $1,410 is a lot of $ saved right there. Good you're in it for the long-haul!
1
Reply
+ Emoji
M
G
Dec 24 2020
Interesting fund. I'm not one to be in a position to endorse this one or not, but will add that I do think if you're a US growth investor, looking at mid-caps in particular is worthwhile. As the economy continues to recover, I think mid caps and small caps will outperform large cap.
1
1
Reply
+ Emoji