Judging from other funds, even those that did well out of the starting gate, little or nothing will be distributed in December... Wintergreen did very well off the bat and had a zero distribution the first year if I recall correctly

Ajw 

The asset allocation has been posted...

http://www.leutholdfunds.com/objects/PDF%20Files/20080703%20GLBLX.pdf

surprising to see indexes in there...

Ajw 

Ajw, Thanks for posting the asset allocations. I don't own this fund but I hold two other Leuthold funds (LAALX and GRZZX). What interested me is the 13% allocation to global bonds. Mohamed El-Erian recommends 9%. So here we have two respected sources allocating 9% to 13% to global bonds.

I saw in another post that you were thinking of reducing your USD hedge, but keep in mind that the forex market is extremely volatile these days and that MERKX currently yields a respectable 6.79%. MERKX's incremental gain (+0.16%) today may be due in part to its 7.8% weighting in gold. I take it the Fannie/Freddie rescue was supposed to help support the USD, but it pulled the rug out from under the rest of the financial sector, especially regional banks and mortgage lenders, and the USD ended the day nearly flat.

Me?  Hedging the dollar?  I do hold about 50% foreign equities but I aint good enough to trade around currency price movements... must have been another esteemed poster

Ajw 

After further research, I would be very hesitant owning this fund for a long term period. With the expesne ratio as high as it is, it will really eat into returns over the long term.

Consider this scenario. Say you invest $20,000 into the fund today, and let's assume a 10% annual return and let's say you hold the investment for 20 years. Look at the results below. Pretty scary how that expense ratio eats at the gains.

 

Results	Leuthold Global Fund Retail Class Shares
Ticker Symbol:	GLBLX
Investment Amount:	$20,000.00
Estimated Return You Selected:	10% (This rate of return is above historical market averages.)
Holding Period:	20 Years
Fund Value After 20 Year(s):	$88,941.44
Profit/Loss:	$68,941.44
Total Fees & Sales Charges:	$19,127.25
Total Fees:	$19,127.25
Total Sales Charges:	$0.00

 http://apps.finra.org/Investor_Information/EA/1/mfetf.aspx

Compare the above to the example below. The only thing that is changed below is the fund, FBALX (Fidelity Balanced). All the parameters are the same:

Results	Fidelity Balanced Fund
Ticker Symbol:	FBALX
Investment Amount:	$20,000.00
Estimated Return You Selected:	10% (This rate of return is above historical market averages.)
Holding Period:	20 Years
Fund Value After 20 Year(s):	$119,098.49
Profit/Loss:	$99,098.49
Total Fees & Sales Charges:	$6,776.14
Total Fees:	$6,776.14
Total Sales Charges:	$0.00

Here are a few comments on your analysis. 

You are spot on that expenses matter, have always mattered, and will always matter.  So that clearly gives the edge to FBALX. However, it is extremely unlikely that FBALX with AUM of $26B will significantly reduce the current expense ratio of 0.60%, whereas it is highly likely that as AUM climb for GLBLX, the expense ratio will decline in accordance with other Leuthold funds (LCORX: AUM $1.7B and ER of 1.15%; LAALX: AUM $1.95B and ER of 1.43%). So with a likely declining expense ratio for GLBLX over the next 20 years, the listed 20-year fund values are questionable.

What matters even more than a fund's expense ratio are the fund's returns after expenses. Here, the Leuthold funds will likely outshine FBALX.  The estimated annual return you selected (10%) is too high for FBALX and is likely too low for GLBLX, based on the long term record of LCORX. So far, LAALX has outperformed FBALX YTD and over the past year. Also, LCORX has outperformed FBALX YTD, and over the past 1-, 3-, 5-, and 10-year periods.  In addition, LCORX has had similar low standard deviations but higher sharpe ratios than FBALX over the past 3-, 5-, and 10-year periods. So IMO, any of the Leuthold funds with a flexible fixed income exposure will likely outperform FBALX in the future.

Also, Leuthold has shown that they will close a fund at reasonable AUM, whereas Fidelity has not.  As a general rule, I would be more inclined to invest in small, agile funds than in large, bloated funds.

Next you have to look at management.  Fidelity has historically used a revolving door management model, with no discernible role model to mentor the younger managers.  Here, Leuthold has the edge, as Steven Leuthold --despite being about 70 years old -- has mentored second and third generation managers at his firm.  I am definitely more confident in management continuity at Leuthold than at Fidelity.  

So bottom line, I would much rather invest in GLBLX than in FBALX over the long haul.

Kevin 

Its true that in theory a low cost fund will outperform a higher cost fund assuming all else is equal... but of course the mandates of the Leuthold funds and the Fidelity fund mentioned are different and the Leuthold funds have a broader palette of investments to choose from and a proven ability to be right about those asset and sector allocations to contribute to long term returns... if you look at balanced funds some of the few to approach the First Eagle/Ivy hallowed ground are the Leuthold funds...

In my work I have a lot of contact (not related to investing) with money managers in San Francisco and I see their offices and homes quite frequently... and I see the Leuthold research on people's desks so often that its clear their work is universally respected and used regularly in the investment industry... I see other research companies materials on folks desks also, but none of those companies have publicly available mutual funds... I think that many investors dont really understand the quality of what they are getting with the Leuthold company... they seem to have the attitude of a one man shop with the added dimension of a lot of young and bright people who seem to have drunk the Leuthold Kool-Aid...

I understand the attention to low costs, but to me when you get this level of macro and micro research and management and proven ability to implement that to produce real world capital appreciation and protection, its a different thing than a Fidelity mutual fund... much different

Ajw 

Guys, I was not intendind to compare FBALX with GLBLX. I was simply showing the difference between a high and low expense ratio. I could have picked any fund to compare to GLBLX. It was just for example purposes.

Good analysis though, and I agree with you guys on a lot of grounds.