How did your funds fare in 2007?

[zetta]

How do you calculate the internal rate of return, especially when you have added money mid-year?

[jIM_Ohio]

depends how exact you want the IRR to be. I just consider all contributions as one lump sum.

IRR= EOY balance/(previous year balance+contributions)

There are probably other ways to do this. I am checking the formula before I run it- and I also need to see wife's Roth balance and deposits for year before posting it anyway.

[zetta]

How do you look up the returns that are quoted here? The American Funds website has quotes for "Average Annual Total Returns" with columns for "Monthly" and "Quarterly", and the values are often quite different. (It also has "Year To Date", which isn't very useful on Jan 2!) Would "Total Return 2007" in Morninstar be the right one to look at?

My IRR was 12%, 13%, and 14%, in my taxable, IRA, and ROTH accounts, respectively.

[disneysteve]

How do you look up the returns that are quoted here?

(It also has "Year To Date", which isn't very useful on Jan 2!)

It may depend on the fund, but they should all be reporting their average annual return for 2007 at this point. I just checked Vanguard's site and they have a section titled "Average Annual Total Returns as of 12/31/2007" that gives the 1-year, 5-year, 10-year and since inception numbers.

[MonkeyMama]

FICDX 35.02%

(copy and pasted the one I had)

Int'l funds were up 16% (FIGRX & Vang Int'l Index)
Dodge & Cox Int'l 12%?
Vang total Stock Index 5.5%
T Rowe Retirement 6.8%
Vanguard Star 6.58%
Fidelity Value 5%
Cash 5%-5.5%
Bruce Fund - 5%?

Some of these were only through 11/30, hard to find data for smaller funds & Fidelity has not updated to 12/31 yet).

Yeah, Int'l did really well but since we were not heavy in it I think our IRR was only 5% or so. We moved a lot of stuff around this year though. We didn't own anything all year I don't think. Likewise we dropped a couple and don't intend to do much for 2008 other than dollar cost average into the indexes.

My dh's portfolio in the Vanguard one and the simplest. He was up about 12% overall. Our cash did decent (have some of our retirement in cash - not much). & then Bruce Fund and Fidelity Canada really drug down my portfolio (bought FICDX towards year-end and it dipped a bit). So my IRA had like a 1% return. Which really watered down our IRR.

[jIM_Ohio]

my prelim IRR for 2007 was 7.4%. I am checking the numbers, but that was the first calculation which I checked twice. Third edit showed spreadsheet pointing to wrong cell.

(starting value-.5*deposits/ending value+.5*deposits)-1*100=25% for 2007.

[jIM_Ohio]

How do you calculate the internal rate of return, especially when you have added money mid-year?

the calculation I was given
What equation do you use to determine returns?

[(end value - 1/2 contributions ) divided by beginning value + 1/2 contributions ) -1] x 100

[kv968]

401k:

Fidelity Growth Co (FDGRX) - 19.89%
Fidelity Spartan S&P 500 (FUSEX) - 5.43%
Fidelity Puritan (FPURX) - 6.17%
Fidelity Bond (FBIDX) - 5.27%
Vanguard Int'l Index (VGTSX) - 15.52%
American Funds Europacific (RERFX) - 19.22%
Northern Small Cap Index (NSIDX) - (-1.91%)
Company Stock - 4.75%

Roth:
T Rowe Latin America (PRLAX) - 48.93% (unfortuantely wasn't in this all year)

All in all, not too bad. Probably better than anything I'll be able to do this year.

[Scanner]

I own the same JAOSX fund. How were you able to earn 47%, if the fund had 27.76% YTD return (link)? Want to share your secret?

Zetta,

You know. . .I took my Jan 1rst balance and my January 2nd balance and just calculated it and came up with that.

But I did move some money out in February last year to SLV.

I'm not sure if that affected it.

It did recently drop from around $61/share to 53/share like in one day (had a 10% loss).

But mutual funds are weird. . .sometimes I think the share price drop has to do with the mutual fund manager taking a profit (selling off positions???). Maybe Janus did this. . .I don't know. I think it's back up to $53 today.

[disneysteve]

It did recently drop from around $61/share to 53/share like in one day (had a 10% loss).

Was that the day they paid their year-end distribution? Funds are required, at year-end, to pay out their capital gains to shareholders. The NAV drops but your account value remains the same because you are given additional shares to make up the difference (assuming you reinvest - otherwise you get a check).

[jIM_Ohio]

But mutual funds are weird. . .sometimes I think the share price drop has to do with the mutual fund manager taking a profit (selling off positions???). Maybe Janus did this. . .I don't know. I think it's back up to $53 today.

Mutual funds price are NAV (net asset value).

Assume a mutual fund owns 5 companies, holds 10 shares each, and the original value of each share was $100.

Assume 5 people bought 1 share of the fund

5*10*100=$5,000 The mutual fund holds $5,000 in assetts.

The share price for this fund is $1000 (5,000/5=$1000).

Assume all 5 stock positions went up the same amount to $120 (a 20% gain).

5*10*120=$6000.

The new share price for the fund is

$6000/5= $1200

If one of the stock positions is sold by the manager (10*120=$1200), the NAV is still the same.

4*10*120 (this is the value of the 4 positions still held in stock) +$1200 (the amount of cash held from the sale of the 5th position). So the share price is still $6000/5=$1200.

The real situation gets complicated by two additional factors.

1) expenses were never taken into account in above example.
2) new money adds to the top line. Meaning if a 6th person bought a share for $1200, the fund manager has more assets ($6000 in stock holdings and $1200 cash). In addition if one of 5 original share holders sells their sahre (cashes out), the manager needs to liquidate a portion or all of a stock position to pay that share holder.

[Fern]

You guys own way too many funds.

I've always felt that yes, i have too many funds. The problem is that half of them are IRAs and half are taxable mutual funds. There are certain funds within my chosen mutual fund family, t. Rowe Price, that i really like and that perform well, so in a few cases i actually have 2 accounts with the same fund, 1 is tax-deferred and 1 is taxable.

Most of the my numerous funds are domestic stock funds, and i admit to liking to diversify into small cap value, small cap stock, an index fund, mid cap growth fund and so on.

[Fern]

This is a great point. It doesn't matter how the fund did. It matter how your investment in the fund did.

If you are dollar cost averaging, putting perhaps $50/month into the fund, you didn't earn that YTD return because you didn't have all of your money in the fund the whole time. If the fund was up sharply early in the year and then lost ground the rest of the year, they might still be posting a positive YTD return but you could have earned much less, or even lost money.

True, but in my case, i've added nothing to my funds all year long, and taken nothing out, either. My excess $$ went toward paying down the mortgage and contributing to my 401k, which was not with T. Rowe Price.

[Fern]

my prelim IRR for 2007 was 7.4%. I am checking the numbers, but that was the first calculation which I checked twice. Third edit showed spreadsheet pointing to wrong cell.

(starting value-.5*deposits/ending value+.5*deposits)-1*100=25% for 2007.

My T. Rowe 1 year returns looked quite rosy, but using Jim's formula my return for 2007 was 8.1%.

[jIM_Ohio]

bump for snowgirl