How much fees are too much?

[lordmetroid]

I need a small cap fund for my Golden Butterlyfly Portfolio.
So I have narrowed it down to two funds:
The DNB Sweden Micro Cap (green line) shows a mutual fund with a fee of 1,5% which invest in companies which is at most 0,5% of the total stock market.
the AMF Aktiefond Sm�bolag (yellow line) shows a mutual fund with a fee of 0,6% which invests in mid and small cap companies.

I do not really like the investment policy of the lower cost mutual fund because it invests more in mid sized companies. However, I do like the lower fee.
On the other hand the mutual fund with a high fee have the last couple of years as can be seen by the charts performed much better.

How should I decide on which mutual fund to get for my portfolio, is the recent track record of the higher costing mutual fund worth 3x as large fee?

[MachineGhost]

Suggest you read this thread: http://gyroscopicinvesting.com/forum/st ... #msg116914

I need a small cap fund for my Golden Butterlyfly Portfolio.
So I have narrowed it down to two funds:
The DNB Sweden Micro Cap (green line) shows a mutual fund with a fee of 1,5% which invest in companies which is at most 0,5% of the total stock market.
the AMF Aktiefond Sm�bolag (yellow line) shows a mutual fund with a fee of 0,6% which invests in mid and small cap companies.

[koekebakker]

Are these active funds or passive ones? If not, what index do they track? What is the amount of companies they have?
In general you should pick the cheapest especially when the difference in expenses is so large.

Mid and small behave very simililarly so I wouldn't worry about that.
What could be an issue is that these are smallcap-growth funds instead of value.
Do you have access to any other funds or etf's? SPDR for example has a European value-weigted scv fund with an ER of 0.3%

[lordmetroid]

Are these active funds or passive ones? If not, what index do they track? What is the amount of companies they have?
In general you should pick the cheapest especially when the difference in expenses is so large.

These are "active funds". Sadly, there are no small cap index funds available for the Swedish market yet. They got a lot of companies in their portfolio so they are almost index funds and track the MSCI Sweden Small Cap index fairly well.

AMF Aktiefond Sm�bolag (morningstar.se)
DNB Sweden Micro Cap (morningstar.se)

[koekebakker]

I would prefer the cheaper one. It's better diversified and costs are a better predictor of future performance than past performance.

[lordmetroid]

With a little bit research I came to the conclusion that there two funds are hidden index funds with way to high fees.
So I have decided to create my own portfolio of small cap stocks. The fees will be 0,25% to 0,5% depending on many of the stocks I need to rebalance in a year.