01-09-2022, 11:45 AM
What are the downsides to something like VFTAX?
<!-- SC_OFF --><div class="md"><p>Sorting all of <a href="https://investor.vanguard.com/mutual-funds/list#/mutual-funds/name/month-end-returns">Vanguard's Mutual Funds</a> by average return since date of inception, VFTAX (FTSE Social Index Fund Admiral Shares) is performing extremely well.</p> <p>I've been following the Boglehead method of investing in VTSAX but the potential for significantly more return is on the table with some of these other mutual funds. Here is what I understand:</p> <p>-Diversity is important to hedge against unpredictable events</p> <p>-Total stock market index funds are historically reliable, you can comfortably expect a rate of return of at least 8%</p> <p>But 8% is chips compared to what some of these mutual funds are returning even with the higher expense ratio. I would like to better understand the downsides before I move money into them, online investment calculators really make it hard not to want to do this.</p> <p>Is the downside essentially that I would be entrusting a random person at Vanguard that I don't know to decide what companies reside in the mutual fund? Or is there more to it than that?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/helloworlf"> /u/helloworlf </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/rzklac/what_are_the_downsides_to_something_like_vftax/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/rzklac/what_are_the_downsides_to_something_like_vftax/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>Sorting all of <a href="https://investor.vanguard.com/mutual-funds/list#/mutual-funds/name/month-end-returns">Vanguard's Mutual Funds</a> by average return since date of inception, VFTAX (FTSE Social Index Fund Admiral Shares) is performing extremely well.</p> <p>I've been following the Boglehead method of investing in VTSAX but the potential for significantly more return is on the table with some of these other mutual funds. Here is what I understand:</p> <p>-Diversity is important to hedge against unpredictable events</p> <p>-Total stock market index funds are historically reliable, you can comfortably expect a rate of return of at least 8%</p> <p>But 8% is chips compared to what some of these mutual funds are returning even with the higher expense ratio. I would like to better understand the downsides before I move money into them, online investment calculators really make it hard not to want to do this.</p> <p>Is the downside essentially that I would be entrusting a random person at Vanguard that I don't know to decide what companies reside in the mutual fund? Or is there more to it than that?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/helloworlf"> /u/helloworlf </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/rzklac/what_are_the_downsides_to_something_like_vftax/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/rzklac/what_are_the_downsides_to_something_like_vftax/">[comments]</a></span>Kind Regards R