Is Third Avenue Funds good or bad?

Quick question. Does anybody own third avenue funds? They look like a very good mutual fund company and morningstar gives them a high rating. The only thing I am worried about is there expense ratio is a little high. Any advice?

If their expense ratio is a little higher than you like, is there a similar fund with similar rates of return with a lower expense ratio (and no extra load)?

benryanv,
Congrats on doing some homework and getting your retirement savings off to a good start.

My wife and I have the Third Ave Value fund in one of our IRAs. Personally, I don't see an E/R of 1.08% as being an issue, especially among small/mid cap funds. The way I see it, as long as the fund maintains a history of beating its index and remaining near the top of its category (and TAV fund does a good job at this overall), I don't care how much they keep in expenses because I'm still getting more in returns than I'd get with most other funds... but that's just me (there are many others who have differing opinions/logic on expenses, but the bottom line is consistent higher returns and thereby, more money in your pocket).

Below is a list of other small & mid cap funds you might consider if you don't want to go with TAV. They're all no-load funds. (Along with TAV, my wife & I have have 3 of the following in our various accounts, and the others I just watch periodically to see how they perform)

Best of luck.
Rookie

Royce Value Plus Service (RYVPX)
Rainier Small/Mid Cap Equity (RIMSX)
Hodges (HDPMX)
Forward Hoover Small Cap Equity (FFSCX)
Bruce (BRUFX)
FBR Small Cap (FBRVX)

benryanv,
I forgot to list this mid-cap blend fund that you might be interested in.
It's another no-load fund, from Fidelity. It has an E/R of .85%
An investment in this fund 5 years ago would be worth 4 times as much today!
It is consistently ranked at the top of its category and smokes its index by double-digits.

Rookie

Fidelity Leveraged Company Stock (FLVCX)

Rainier Small/Mid Cap Equity (RIMSX) probably won't be appropriate here as the initial purchase minimum is $25k, and it looks like it's now closed to new investors.
Other initial IRA purchase minimums and additional purchase minimums are as follows according to Morningstar:
Third Avenue Value Fund (TAVFX) - $2500 / $200
Royce Value Plus Service (RYVPX) - $1000 / $100
Hodges (HDPMX) - $250 / $50
Forward Hoover Small Cap Equity (FFSCX) - $4000 / $100
Bruce (BRUFX) - $1000 / $500
FBR Small Cap (FBRVX) - $1000 / $0 (I'm guessing that $0 means any amount?)
Fidelity Leveraged Company Stock (FLVCX) - $2500 / $500

Rookie

Hello,

The expense ratios of the Third Avenue Funds are not the lowest in the mutual fund industry but they are certainly not high. They have a talented group of portfolio managers and analysts who deserve to be paid reasonable compensation. I like the Third Avenue Funds and their conservative investment approach to value investing.

I hope this helps.

Michael A. Weiss, CFA
The Editor
The Mutual Fund Investor
http://www.mutualfundinvestor.net