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I have a nonretirement account with Federated Kaufmann fund which is 20 years old with 15k in it. The performance has been above average during these years, but the expense is high at 2%. I am wondering if it would serve me to sell it and substitute it with a low expense ETF. I do not need the money in this account for at least 15 years.

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    2%? That's not high, that's criminal.
    – Joe
    Aug 4, 2016 at 7:44
  • Unless their performance has been more than 2% above the average, that fee means their real performance has been below average. And "past results are not a guarantee of future performance." Historically, low fees are the way to go, which is part of why index funds (fees closer to 0.2%, sometimes less) are such a win.
    – keshlam
    Aug 4, 2016 at 10:04
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    As far as taxes go, you are going to pay them eventually; it might as well be now.
    – keshlam
    Aug 4, 2016 at 10:06
  • @joe, we should probably make this an Answer
    – keshlam
    Aug 4, 2016 at 10:06
  • You need to run the numbers, which will vary depending on many factors, including your overall income, the amount of gains in the fund, etc. Depending on your tax situation it may make sense to sell the fund gradually to avoid pushing yourself into a higher tax bracket with one large sale.
    – BrenBarn
    Aug 5, 2016 at 17:52

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It's well worth to sell it for a low-cost ETF, even with taxes considering you want to keep it invested for 15 years more.

An ETF fee is between 0.07% to 0.7%. The massive saving from what Federated Kaufmann Fund is charging will compound greatly over the term.

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