Saturday, March 23, 2013

Low Fee Money Manager in Tampa Beats the Big Guys

But the Big Guys Get Much Higher Fees

If a pension fund is large enough to afford the very best money managers shouldn’t they do so.  For example, here is the amount of resources CALPERS, the California state pension fund devotes to management of its funds.

Calpers—which employs 125 consultants and 1,100 money managers

And here is what the Tampa Firefighters pay their pension fund manager.

Bowen Hanes charges a management fee of 0.25%, which totaled about $4 million last year for the firm.

And here is the performance the Tampa Firefighters got for that fee, which is about in line with what an index fund would charge.

As of Dec. 31, Mr. Bowen's annual returns beat pension giant Calpers—which employs 125 consultants and 1,100 money managers—over three-year, five-year and 10-year spans.

Of course, almost all money management companies do very well, very well for themselves of course.  For the client, well many time you don’t get what you pay for.

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