Betting on Financials - John Hancock Classic Value Fund
Richard Beddard at Interactive Investor put me onto this one today. He did a post on Richard Pzena and had an interesting link to a Forbe's interview with Pzena.
My reply to Beddard's post is basically that we really don't know which financial companies will survive the deleveraging, by the time share dilution is done they won't resemble anything like they were before, and their level of historical profits weren't based on any thing sustainable. My gut feeling is that about half the profits will never come back, or at least won't come back while the Great Deleveraging lives in memories.
But, that is what got me looking at Pzena, not what I intended to blog about. I did a search I found this post from almost a year ago pointing out Pzena's stellar returns going back to 1996, 16% per year on the John Hancock Classic Value Fund.
From the link to the John Hancock fund it starts at Nov 11, 1998 with a share price of $11.74. That's about 9.46 years ago. So, 73.5% return in 9.46 years. That works out to 5.4% annualized back to Nov 11, 1998. I picked the day I started simply because it is the oldest date I could easily get data for.
Looking at Google I see something I think super yuck, front load 5.00%. The easiest way I can think to handle that, add 5% to the $11.74, so with the load that's like you'd have to pay $12.33 instead of $11.74 and the gain would be more like 65.4%, and the return more like 4.9% annualized. Amazing, a 5% front end load takes 10% of the almost 10 year rate of return.
On another point, I had freudian slip and typed HanCock and then as I was thinking how challenging the teasing might be for any poor kid to be blessed with such a name. Then I thought han isn't far from hand... What a name...