Hello everybody, just wanted to share something that I discovered and see what everybody thinks of my conclusion. This is about investing in mutual funds versus Index Funds/ETF's in a Roth IRA. I will be using T Rowe Price's Mutual funds and Vanguard's ETF's. I noticed that Vanguard's ETF's have annual returns that are very close to Trowe's mutual funds and decided to do some math to figure out if I should continue purchasing mutual funds with them or completely switch to Vanguard. I mean after all we all want the most amount of non-taxable money in our Roth IRA's when we retire right? I selected five of the best performing funds that each company had to offer and wrote down each funds expense ratio as well as their 10-year ROI average. I then calculated the average expense ratio and average ROI assuming the money I put in would be spread evenly into each mutual fund or ETF. I noticed that the Vanguard account actually came out with more money than the actively managed mutual funds. What do you guys think of this? I would expect mutual funds should outperform ETF's by a long shot. Here is the data and tell me what you think. If you feel like I missed something im all ears and open to criticism.Vanguard: Expense Ratio% 10-YR ROI%
VTHR 0.10 13.88
VUG 0.04 16.71
MGK 0.07 17.39
VOO 0.03 14.14
VOOG 0.10 16.38average 0.068% 15.70%$2500 initial investment + $5000/year for 35 years =
GROSS= $6,443,237 NET= $6,333,474 FEES= $109,762
TRowePrice: Expense Ratio% 10-YR ROI%
PRMTX 0.76 18.70
TRBCX 0.69 17.07
PRHSX 0.76 19.05
RPGEX 0.85 13.27
TRULX 0.74 13.66average 0.76% 16.35%$2500 initial investment + $5000/year for 35 years =
GROSS= $7,594,556 NET= $6,266,627 FEES= $1,327,929
Calculator used: Nerdwallet mutual fund calculator
Quick EDIT: I selected 5 of the best performing funds in my own opinion. There are plenty of different funds to choose from this was just my selection.
Submitted May 06, 2021 at 12:34AM by Anon7416 https://ift.tt/3h5Mqdy
