T. Rowe Price: How To Collect Mutual Fund Fees Rather Than Pay Them

6/16/17

Summary

  • By buying shares of TROW, a DG investor can collect dividends supported by mutual fund fees.
  • TROW is a good investment partner growing its revenue, its profits and its dividend.
  • TROW shares are currently selling below the NPV of its future dividends, an opportunity for DG investors.


Is TROW a good investment partner?

T. Rowe Price (NASDAQ:TROW) most recently came to my attention because a poster made a comment about it in an article I was reading. I became even more interested when I saw an article on Seeking Alpha where a long time dividend growth investor decided to sell his shares. That eventually led me to this article by Simply Safe Dividends. From the various articles, I saw that TROW had a lot of the characteristics of companies I want to own. The concern that led many authors to sell the stock was that TROW's reliance on actively managed mutual funds put them in a declining market. I will explore that later in the article.

Simply Safe Dividends' article also provided the average fee charged on TROW's funds at 50 basis points, that the average fee for actively managed funds was 77 basis points, and that passive funds had an average fee of 10 basis points. On that basis it's quite clear that active funds start with a significant handicap. READ FULL ARTICLE HERE

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