3
Morningstar FundInvestor
February 2
013
On the flip side,
Caldwell & Orkin Market Oppor
tunity
COAGX
tops the list with costs around
1
.
28%
. The fund shorts stocks, and shorting can be
pricey. No surprise either to see
CGM Focus
CGMFX
at just less than
1%
in brokerage commis-
sions as Ken Heebner trades very rapidly and
does some shorting. Others that stand out are the
aforementioned Brandywine,
Merger Fund
MERFX
, and
Dynamic US Growth
DWUGX
, which
range between
0
.
37%
and
0
.
46%
.
I wouldn’t go so far as to say that this means
these funds should be avoided, but, as with high
expense ratios, they do have a higher hurdle to
overcome. Costly trading strategies have to pro-
duce great results to work.
œ
Brokerage Commissions’ Predictive Power
Four-Year Time Period
|
Begin Year: 2008
Asset Class
Brokerage
Commission Quintile
Gross
Return %
Gross
Return Rank
Gross Return
Success Rate
Avg. Brokerage
Commission in Quintile
U.S. Stock
1 (lowest)
8.26
43
53.29
0.0405
2
7.79
48
41.91
0.0998
3
7.55
51
36.59
0.1524
4
7.40
52
33.06
0.2287
5 (highest)
6.95
57
25.60
0.6471
Sector
1
8.14
47
47.44
0.0499
2
7.81
54
33.80
0.1081
3
8.83
43
57.75
0.1655
4
7.32
53
34.25
0.2726
5
5.91
55
36.99
0.6045
International Equity
1
4.57
50
43.33
0.0546
2
4.70
50
45.35
0.1246
3
5.15
50
41.28
0.1884
4
4.42
52
32.16
0.2760
5
4.40
52
33.33
0.6258
Balanced
1
7.41
47
46.77
0.0181
2
7.19
48
43.40
0.0467
3
7.68
48
45.28
0.0689
4
7.53
47
46.30
0.1115
5
6.48
62
29.63
0.3063
Success Ratio based on total number of funds that beat category
average subsequently divided by total number of funds with brokerage
commission as of beginning time period.
Gross return is total return before expense ratio.
