Apparently Congress is not alone in its profligate ways. According to US News:
More than 75 percent of advisers surveyed indicated that not saving enough was the major roadblock to their clients’ success. This is important because the amount saved is something that people can control, while investment performance or economic conditions are largely beyond our control.
Close behind, 73 percent of the advisers surveyed indicated that a client living beyond their means was the biggest obstacle to financial success. Again, an area that is within an investor’s control.
This is from a survey of more than 600 advisors done by Principal Financial. The two biggest barriers to client success were not saving enough and living beyond their means, two factors which are obviously closely related. If you are living beyond your means, clearly you are not going to be able to save enough. Americans’ compulsive overspending seems to be mirrored by America’s compulsive overspending.
I guess the good news is that overspending is a behavioral issue under our control. Willpower is hard. An automatic investment plan is probably the way to go, especially to get started. There are lots of good balanced funds around that can serve as a complete investment program. Of course, I am biased in favor of the Arrow DWA Balanced Fund (DWAFX).
To obtain a fact sheet and prospectus for the Arrow DWA Tactical Fund (DWTFX) or the Arrow DWA Balanced Fund (DWAFX), click here.
Source: wikimedia.org
You may possibly add that your investment funds have very high fees, haven’t earned a profit since you started them, and thus carry only a 1 star morningstar rating.
It seems that you do not understand how mutual funds are structured in the US very well. First of all, we do not set the fees on the funds, because they are not “our” funds. We are a sub-advisor to the funds. The fee we receive is much less than, for example, the sub-advisory fee paid to Blackrock Investment Management or Blackrock International Ltd. for the Blackrock Global Allocation Fund, a $40 billion competitor. Even though MDLOX has an enormous economy of scale, Blackrock is collecting a higher fee than we are.
The fund owner, Arrow, sets the fees. I would love for it to be lower too. I wouldn’t be surprised if they reduced fees as they achieved economies of scale too, something that is pretty typical across the industry. But you should understand that we have virtually nothing to do with the fee being high.
Your math is also wrong. The Arrow DWA Balanced Fund, which has been around for almost five years, is up from inception, so it has earned a profit since we started-even considering the massive bear market of 2008. The Arrow DWA Tactical Fund is down only about 1.5% from inception. That fund had a strategy change that shareholders approved in August 2009, and it has performed very well from that point. (You also failed to mention that the market is still well below its all-time highs!)
I’m not sure what goes into the Morningstar ratings, so I’m not sure what they don’t like. Morningstar is coming out with a new rating system though, because studies (others and their own) that their ratings are not predictive of future performance. I wouldn’t be surprised if our ratings improve over time, because performance has been pretty good for the category.
Thanks for your comment. We know we’re not perfect; we’re always trying to improve. However, your comments would be accepted in the spirit of constructive criticism if 1) they were actually constructive, and 2) they reflected more accurate knowledge of the industry.
you may get criticism because you seemly brag about your performances but it’s below ave. the return on your balanced fund isn’t something to boast about. the tactical fund obviously needed a strategy change after 2008.
MDLOX is a 4 start fund with a 1.08% fee whilst yours is almost twice as much at 1.95%. investor probably not worried about what you get but instead what they pay.
morningstar doesn’t rate yours well because of peer comparibles. my friend is a dorsey subscriber and they don’t compare well with your own ratings either.
your DWAFX balanced fund has only averaged 3.42% 5 yr vs. 3.88% for its category average and 8.55% for top funds like Intrepid Capital and even huge well known funds like 7.4% for Janus Balanced. if you really believe in relative strength you have to go with the higher relatives!
http://news.morningstar.com/fund-category-returns/moderate-allocation/$FOCA$MA.aspx
Hogwash.
1) I would like the fee on the Arrow Fund to be lower also, but it’s not our fund. Arrow sets the fee, not us. I explained this before, but you obviously didn’t understand the comment. Do people complain to you about the price of the lettuce at the grocery store you work at, even though you obviously have no control of the lettuce price?
2) Investors should be more concerned about their returns than what the fund is charging.
3) DWAFX doesn’t have a five-year return. You didn’t even read the table right.
4) You don’t know much about relative strength. Portfolios formed using 3-year and 5-year returns tend to mean reversion, not continuation. Continuation tends to come from portfolios formed with 6-12 month returns.
5) From a study cited on Advisor Perspectives:
“And when managers are tested, so are the systems used to predict their performance. Perhaps no system is as widely used as Morningstar’s “star” rating system.
We originally reviewed the predictive ability of Morningstar’s ratings in October of 2007, and here we update the results of that study, using data for the three years ending September 30, 2009.
Our analysis found that Morningstar’s ratings lost virtually all of their predictive ability when measured over a full market cycle.”
On the plus side, we should have a five-year return for DWAFX soon.
I think the returns from DWAFX have been pretty good, and I think the fund is constructed in a robust way that will continue to generate pretty good returns. As investment managers, we’re just focused on trying to do the best job we can for our investors. Like all managers, we have good years and bad years. Sure, I’m going to mention when I think we have done well, but I don’t knock our competitors. There are many other good funds and good management teams in the business.
You’re free to have a different opinion and free to invest in the fund of your choice. But you’re not free to make up bogus facts.