Some more info on Schiff's new Mutual Fund...experts, help?

[muh_roads]

Need a translator...is this expensive? Minimum is $2500. This is for EPHCX btw

The load is 4.5%, but works its way down with investments over 50k. The management fee is 1.15%/year, with a .25% 12b1 fee. The fund had been in cash, but has been moving into positions over the last week. The largest position therefore is mainly cash, but the top ten (equity holdings) should be posted next month.

I'm not an expert but that doesn't sound very cool. Is even having a "load" at all very common? Is that the initial cost to get in? Also what are they talking about "cash"? As in, not yuan?

[legion]

Need a translator...is this expensive? Minimum is $2500. This is for EPHCX btw



I'm not an expert but that doesn't sound very cool. Is even having a "load" at all very common? Is that the initial cost to get in? Also what are they talking about "cash"? As in, not yuan?

A mutual fund load is a transaction fee.

Cash typically means in a money market, or a short term bond, which is basically like holding cash in a savings account with a slightly better interest rate.

I wouldn't recommend investing in Schiffs mutual fund. It's like investing in the company you work for, you have too much emotional interest to make rational decisions. Plus you are paying someone else to decide what to do with your money with the belief that they have some magical knowledge as to what the market is going to do in the future.

If you are looking for somewhere safe to put your money than look no further than Harry Browne's fail safe investing.

http://crawlingroad.com/blog/harry-b...olio-archives/

If you don't know who he is, Harry is dead (RIP), so you know he has no personal interest in promoting his permanent portfolio.

[muh_roads]

A mutual fund load is a transaction fee.

Cash typically means in a money market, or a short term bond, which is basically like holding cash in a savings account with a slightly better interest rate.

I wouldn't recommend investing in Schiffs mutual fund. It's like investing in the company you work for, you have too much emotional interest to make rational decisions. Plus you are paying someone else to decide what to do with your money with the belief that they have some magical knowledge as to what the market is going to do in the future.

If you are looking for somewhere safe to put your money than look no further than Harry Browne's fail safe investing.

http://crawlingroad.com/blog/harry-b...olio-archives/

If you don't know who he is, Harry is dead (RIP), so you know he has no personal interest in promoting his permanent portfolio.

25% – Stocks (S&P 500 Index)
25% – Long Term US Treasury Bonds
25% – US Treasury Money Market Fund
25% – Gold


bolded = umm whut?

[stag15]

25% – Stocks (S&P 500 Index)
25% – Long Term US Treasury Bonds
25% – US Treasury Money Market Fund
25% – Gold


bolded = umm whut?

Why buy gold if you are buying long treasuries? That makes no sense, unless you are trying to hedge your treasury position. Treasuries are debt, and gold is money. They are complete opposites.

To answer your question Paladin, the 4.5% fee is normal. That is the fee they charge for buying individual stocks as well. I used to have an account with Merryl Lynch, and the fees were 10% to buy individual stocks. The ML account was a joint account my dad started when I was young. Once I got old enough and realized how much we were getting hosed, I sold everything and moved to an online brokerage where I pay $4.50 per trade.

I have an account set up with Euro Pac, but I am all cash right now. I am waiting to learn the top holdings and the evaluations of the companies. I also want to know if the dividends will be held in Yuan, or converted to US dollars. If anyone finds out let me know.

The management fees are high, but the returns are too. They are saying the fund will have about a 5-10% dividend yield (I would like this verified as well). Add in that China is at the beginning stages of their growth into an industrial world power. The p/e of the Hang Seng is like 12, and the companies are growing earnings. Unlike the SP500 where most of the companies have either flat or negative earnings, the Chinese have real earnings and real earning growth potential. As earnings grow, so will dividends; whereas, American company dividends have decreased year after year while CEO pay grows to record amounts (I realize there are exceptions to this).

[Arklatex]

4.5% load is high, but worth it if the fund holds up. So at 6000 investment you'll pay about $250 out of that immediately


Also it's only available to EuroPac clients. I'd like to see it's holdings though.

[eric_cartman]

i think the fees are pretty reasonable, espeically considering these stocks are very hard to buy domestically since some of them only trade on the chinese exchanges.

[muh_roads]

4.5% load is high, but worth it if the fund holds up. So at 6000 investment you'll pay about $250 out of that immediately


Also it's only available to EuroPac clients. I'd like to see it's holdings though.

That's about how much I was willing to try. I had no interest in going all in. The wife has about $8000-9000 from an old job in a 401k we never look at. Was thinking about rolling that small amount into an IRA with this new fund...

edit: thanks stag15 for the explanation.

[Dforkus]

4.5 % is a high load these days, although not unusally high, american funds, one of the better thought of traditional mutual fund companies charges this..

The 1.5% yearly management fee on top of the load is very high.. Most funds that are loaded in that range don't charge any management fee, or a very small one...

Usually a fee like that and a load, is an either or proposition, not both...

If it was me, I'd just wait to find what there top ten holding are, and build yourself a little mini-etf based on it...

Or just play china/india through an index fund which is MUCH cheaper...

[muh_roads]

From the Prospectus...

FEES AND EXPENSES


This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees

(fees paid directly from your investment)

Maximum sales charge (load) imposed on purchases

4.50%

Maximum deferred sales charge (load)

None

Redemption fee (as a percentage of amount redeemed)

2.00%1

Annual Fund Operating Expenses

(expenses that are deducted from Fund assets each year

as a percentage of the value of your investment)

Management fees

1.15%

Distribution (Rule 12b-1) Fee

0.25%

Other expenses2

0.50%

Total annual fund operating expenses2, 3

1.90%

Expense waiver/reimbursement2, 3

(0.15%)

Net operating expenses

1.75%

1

The Fund charges a 2% fee if you redeem shares of the Fund within 30 days of purchase. The Fund’s transfer agent, UMB Fund Services, Inc. (“Transfer Agent”), charges a $15 fee ($20 for Saturday delivery) for redemption proceeds paid via wire transfer or by check sent via overnight delivery. There is also a $15 annual maintenance fee on retirement accounts and a $15 fee for each redemption from a retirement account.

2
These expenses are estimated for the current fiscal year.

3
The Advisor has contractually agreed to waive its fees and/or absorb expenses of the Fund to ensure that Total Annual Fund Operating Expenses do not exceed 1.75% of average daily net assets of the Fund. This agreement is effective until July 31, 2010 and may be terminated by the Trust’s Board of Trustees (the “Board”). The Advisor is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid. The Advisor is permitted to seek reimbursement from the Fund for a period of three fiscal years following the fiscal year in which date fees were waived or reimbursed.

This thread has made me question how much I like Peter Schiff. I thought maybe he was a cool guy wanting to help others out. I used to say he was my favorite jew. But now he seems like just another jew trying to "jew" you out of more of your money through constant weekly fear-mongering. Not that his fear-mongering is incorrect per se, but he gives the impression that he's the only guy in town who can save you.

My initial gut instinct about those fees feeling wrong sound about right after all.

Now I wonder if his Connecticut Senate run is really more about exposure for him to echo what he wants to say and reel in more customers for Europac under the veil of "caring about Americans" because he knows the end game is in and he won't be able to change anything anyway.

I mean at least Ron Paul and Rand Paul have done charity work in their professions and if people have very little and can't pay they would help out. What has Schiff done except be an attention whore for himself?

[legion]

From the Prospectus...

This thread has made me question how much I like Peter Schiff. I thought maybe he was a cool guy wanting to help others out. I used to say he was my favorite jew. But now he seems like just another jew trying to "jew" you out of more of your money through constant weekly fear-mongering. Not that his fear-mongering is incorrect per se, but he gives the impression that he's the only guy in town who can save you.

My initial gut instinct about those fees feeling wrong sound about right after all.

Now I wonder if his Connecticut Senate run is really more about exposure for him to echo what he wants to say and reel in more customers for Europac under the veil of "caring about Americans" because he knows the end game is in and he won't be able to change anything anyway.

I mean at least Ron Paul and Rand Paul have done charity work in their professions and if people have very little and can't pay they would help out. What as Schiff done except be an attention whore for himself?

Ok, let's not be too binary in our opinions here. I'm sure Peter Schiff means the best with his political campaign. But, as a financial advisor you can't expect him to ignore the cult of personality that's been set up for him by this community. This is the kind of schtick most newsletter guys dream of, of course he's going to take advantage. He'd be stupid not to.

Also, please hold back on the derogatory use of the word "Jew."

[legion]

Why buy gold if you are buying long treasuries? That makes no sense, unless you are trying to hedge your treasury position. Treasuries are debt, and gold is money. They are complete opposites.

Listen to the recordings. You redistribute into 25% as soon as the portfolio gets unbalanced. One or two of these asset classes will be doing very well at any one point in time, enough to bring the rest of the portfolio up with it.

Historically this portfolio does 8% YoY even through downturns. The good thing about it is it never really takes a nosedive, and so doesn't scare you into speculating with the money that is dear to you, as Harry used to say.

This portfolio allows you to make good returns from income saved from your profession, which is the very point of investing.

[Feenix566]

The Vanguard Emerging Markets Index Fund charges 0.25% when you purchase, and 0.25% when you redeem. It is diversified among Brazil, Russia, India, and China.

[SooperDave]

4.5% load fee is highway robbery

[ChooseLiberty]

This is what I'm wondering.

What as Schiff done except be an attention whore for himself?

[legion]

This is what I'm wondering.

The community is going to have to seperate Peter Schiff as Investment Advisor from Peter Schiff as political candidate, otherwise we will never be able to get behind him.

I tried to tell a few of you this in the "gold is due to crash" and other threads.

I believe Peter is running for the right reasons, but that doesn't mean he stops being a businessman.

[Feenix566]

I don't see a conflict of interest. Peter honestly believes that China will do better than the US over the course of the next 20 years. That's why he set up the fund. Are the fees high? Yeah, 4.5% is high. If you don't like it, don't invest in the fund. Use another investment vehicle to diversify out of the US economy. That doesn't mean you can't support Schiff in his senate run.

[mtj458]

Outrageous fees are the reason why there is a huge run from mutual funds to ETFs. These fees aren't necessarily abnormal though. Mutual funds are a business and they make money through fees. If you get a good mutual fund, it will perform better than an ETF even with the fees. If it doesn't outperform the index, then that is the risk you agreed to when you bought it. In general, nobody can tell if a fund will beat its benchmark. If you believe Schiff is that good of an adviser, then buy the fund. Otherwise don't.

[Dforkus]

These fees aren't necessarily abnormal though.

4.5% load is on the high end of average..

1.5% yearly management fee, is quite high..

2% fee on withdraw is pretty heinous...

All of them in one fund??? Thats a bit much....

[Cowlesy]

that's an absurd amount of fees. no thanks.

[Cowlesy]

So people who actually deal with mutual funds (my fund experience is with pe funds and 80/20 profits + 1.5% mgmt fees) feel free to correct my math.

On January 1, I pony up $2,500 to buy the mutual fund. Right off the bat, they take $112.50 out as a 4.5% load charge, leaving my invested funds at $2,387.50. We're now at December 31st, and the fund has returned 8% (seems reasonable) -- approximately double the 20yr t-note yield I think. So now my etf shares are worth $2,578.5, less the 1.15% and .25% management and 12b-1 fees totaling $29.65 leaving me now with $2,548.85. I decide to redeem all my shares, taking a 2% hit of $50.98 leaving me with $2,497.87, or a -0.1% return on a $2,500 investment on an ETF.

Those fees, they'll getcha.

[legion]

Of course, Cowlesy, if Peter Schiff really was "right" then those fees are fair because he will obviously beat the S&P many times over.

[lavis88]

4.5% load is on the high end of average..

1.5% yearly management fee, is quite high..

2% fee on withdraw is pretty heinous...

All of them in one fund??? Thats a bit much....

I read through the prospectus, I'm new to investing, and was looking to start up a Roth IRA account with this mutual fund and put in the minimum $2500 to start. The fees do seem a bit high, but Peter was talking about it on his radio show about how he expects dividends alone to be about 8%, and this doesn't even include the rise in stock prices.

Also I think that you are only charged a 2% redemption fee if you do it within 30 days of purchase, see the superscript 1 next to the fee in the prospectus. But then there is a distribution fee of 0.25%, can someone clear this up?

Let's see if I got all these fees right, excluding any sort of return, for a year:

$2500 initial investment
-112.50 (4.5% load fee)
=$2387.50
-41.78 (1.75% Net operating expenses)
=$2345.72

Anyone want to check that math?

[muh_roads]

Alright sorry for the "jew" comment. I just find it amazing that almost all of the top execs at all the elite banks and corporate media are all jewish. The same ones who keep screwing us over...lol

Anyway, back to something more productive... Cowsley. Your math doesn't factor in any dividends...or does that 8% figure calculate that? And do dividends that reinvest back into the stock also get hit with the "load"? Additionally are we also factoring in inflation? Is the yuan projected to beat the dollar from here on out? And at what average?

[specsaregood]

Peter honestly believes that China will do better than the US over the course of the next 20 years. That's why he set up the fund.

But he also believes that the US will never be able to pay off its debt. If the US defaults on its loans, you think china will think twice about claiming all assets in china owned by Americans or American companies? That alone would make me hesitant to invest in china. But that is THSTF scenario, so I guess it depends on how much one believes that will happen.

[lavis88]

So I made a spreadsheet of this fund, please let me know of any corrections that need to be made.

[Cowlesy]

So I made a spreadsheet of this fund, please let me know of any corrections that need to be made.

One thing --- I think the management fee is 1.15%, not 1.5% if the OP's original post is correct.

Other than that, it looks fine. To address Paladin's point, 8% is my all-in guess which would include dividends. I'd LOVE to find an investment that consistently yielded 8% on average. The average yield on the S&P is probably lower.

If you really want to get good S&P data, get it straight from S&P at the link below.

http://www2.standardandpoors.com/spf...P500EPSEST.XLS

Unless Peter plans to deliver huge returns somehow, I think it's a bad investment.

[lavis88]

One thing --- I think the management fee is 1.15%, not 1.5% if the OP's original post is correct.

I actually think the total annual fee is 1.75%, which the prospectus calls "net operating expenses"

Unless Peter plans to deliver huge returns somehow, I think it's a bad investment.

Do you think it's a bad investment because 8% is too optimistic of a return for the fund or because of the fees? I think Peter was saying the dividends alone of the stocks being invested are around 8%, and then that doesn't even take into count if the stock prices themselves go up.

[lavis88]

But he also believes that the US will never be able to pay off its debt. If the US defaults on its loans, you think china will think twice about claiming all assets in china owned by Americans or American companies? That alone would make me hesitant to invest in china. But that is THSTF scenario, so I guess it depends on how much one believes that will happen.

I really can't see China doing this, it seems like it would be one big step backwards and would keep investors, not just from the U.S. scared from investing in the country anytime soon, but sure, I guess that's a risk you take.

[Cowlesy]

I actually think the total annual fee is 1.75%, which the prospectus calls "net operating expenses"



Do you think it's a bad investment because 8% is too optimistic of a return for the fund or because of the fees? I think Peter was saying the dividends alone of the stocks being invested are 8%, and then that doesn't even take into count if the stock prices themselves go up.

I understand his insistence on high dividend yields, but a lot of companies have high dividend yields because they aren't that great of stocks. Typically if a dividend yield gets too far out of control (due to price depreciation), management will cut the dividend to conserve cash (because price depreciation usually indicates something bad is going on with the company or its market). You can have a 15% yield but if your stock is down 40% and never recovers or the dividend is scaled back, you lose all that return.

Over the period you're outlining, I think an average return of 8%, given the period we're heading into, is very very optimistic...but then again I'm a bear. And I think the fees are atrocious for an unproven mutual fund manager.

If he delivered returns that far outstripped the major indices for a year or two, then I'd consider looking at the fund. If he's only returning index-level returns, why not just buy a comparable index and save yourself the fees?

[Cowlesy]

The thing is, I think at some point, Peter will be right, but until then he's got the Federal Reserve and all the Banks peddling the exact opposite of what he's selling. The other thing I worry about is the bullishness on China. I think China is certainly a bullish play, but their Government right now is directly buying into the stock market, and making loans at astronomical levels...and my guess is tons of those loans will go bad.

You have to be VERY CAREFUL which companies you pick over there. I'm not sure if Peter has a team over in China doing research, but I'd certainly feel better if he did.