We're Not These Funds' Only Fans

11/16/2015


Our search for the best stock funds began with our rating system, which ranks more than 5,400 funds on tax efficiency, total returns in periods of up to five years, risk-adjusted performance metrics, and expense ratios.

FUND PORTFOLIOS DELIVER GROWTH
The Forecasts' recommended fund portfolios are a great choice for investor seeking diversification and solid returns. Through Nov. 10, the Growth Portfolio has gained 1.5% in 2015, versus 1.9% for its passive benchmark portfolio. The Conservative Portfolio is up 1.4%, compared to a 1.9% gain for its benchmark. Our benchmarks use three index funds to gauge relative performance.
------------------------------------- Total Returns -------------------------------------
-------- Since Start Of --------
2011
(%)
2012
(%)
2013
(%)
2014
(%)
YTD
(%)
2000
(%)
2005
(%)
2010
(%)
Growth Portfolio
(3.0)
15.3
29.4
6.6
1.5
138.6
110.7
85.2
Benchmark
(2.1)
16.2
28.1
7.1
1.9
89.8
100.8
80.7
Conservative
Portfolio
(0.8)
14.1
25.9
6.5
1.4
135.4
107.7
78.6
Benchmark
(0.2)
13.3
19.7
5.9
1.9
107.8
94.2
62.6
S&P 500 Index
2.1
16.0
32.4
13.7
2.9
91.9
115.6
111.2
MSCI EAFE Index
(Int'l Stks.)
(12.1)
17.3
22.8
(4.9)
(0.3)
45.5
53.8
29.4
Barclays Aggregate
Bond
7.8
4.2
(2.1)
6.0
0.4
130.6
59.1
24.8

But we didn't stop with our scores.

To isolate standout picks superior on several fronts, we also considered rankings from four independent providers, all of which view funds from a different angle.

• Morningstar's star rating considers risk-adjusted returns and accounts for sales charges and redemption fees. The ratings, which reward steady performance, cover three-, five-, and 10-year periods if available.

• Zacks uses a proprietary model to measure trends in earnings-estimate revisions and profit surprises to classify stocks. Typically, the higher the average earnings rank for stocks in a portfolio, the better the fund rating.

• S&P Capital also looks at a fund's holdings, using a stock-appreciation ranking system to gauge valuation and fundamental strength. S&P also considers relative fund performance for up to three years, manager tenure, and portfolio turnover.

• Lipper uses various factors slotted into five categories: total return, consistent return, preservation, expense, and tax efficiency. To gauge consistency, returns are adjusted for volatility and compared to peers. Preservation measures negative monthly returns for periods up to 10 years.

High scores or a lot of stars do not always translate into outsized performance. Still, the Forecasts' ranks uncover attractive picks, partly because our system favors cheap funds — expense ratios are among the best predictors of future fund performance.

If you seek high-potential funds in timely categories, consider the 10 listed in the table below. We focused on funds from categories posting strong recent gains and for periods up to five years. All 10 earn scores of 80 or higher in our rating system, as well as high marks in at least three other ranking systems.

10 ALL-AROUND STUDS
Below are 10 high-potential funds that earn scores of at least 80 in our rating system. All 10 also rank highly in at least three of four popular ranking systems, suggesting the funds are all-around standouts.
Forecasts
Fund
Rating
Morningstar
(1 To 5
Stars With
5 Best)
Zacks
(1 To 5
Stars With
1 Best)
S&P Capital
(1 To 5
Stars With
5 Best)
Lipper
(Avg. Of Five
Scores With
5 Best)
--- Total Return ---
Fund (Price; Ticker)
1
Year
(%)
5 Years
(Annaul.)
(%)
Expense
Ratio
(%)
Category
Bridgeway Lrg.-Cap Gro.
($24; BRLGX)
97
4
1
5
5.0
9
15
0.81
Large growth
Buffalo Discovery
($21; BUFTX)
89
5
2
5
4.2
8
15
1.01
Midcap growth
Fidelity Select IT Svcs.
($42; FBSOX)
84
5
1
5
4.2
22
19
0.81
Technology
Fidelity Select Retailing
($107; FSRPX)
88
5
1
4
4.0
29
21
0.81
Cons. discret.
Nicholas ($66; NICSX)
96
5
1
5
4.4
3
15
0.72
Midcap growth
Polaris Global Value
($22; PGVFX)
97
4
1
5
4.6
3
11
0.99
World
PRIMECAP Odyssey
($24; POSKX)
91
5
4
5
4.8
5
14
0.62
Large blend
T. Rowe Price Int'l Disc.
($55; PRIDX)
96
4
1
4
4.2
8
8
1.21
Int'l small/
mid gro.
Vanguard 500 Index
($192; VFINX)
80
4
3
5
5.0
4
14
0.17
Large blend
Vanguard Growth Index
($56; VIGRX)
81
4
2
4
4.6
7
14
0.23
Large growth
Note: Forecasts fund ratings are percentile ranks, with 100 the best.    Forecasts recommended funds in bold.

 

OUR RECOMMENDED MUTUAL FUNDS
Year-To-Date *
--- % Of Portfolio ---
 
Fund (Price; Ticker)
Return
(%)
Rank
Conser-
vative
(%)
Growth
(%)
Fund
Rating †
Artisan International ($29; ARTIX)
(2.6)
E
9
9
45
Baird Core Plus Bond ($11; BCOSX)
0.3
B
9
4
87
Dreyfus Midcap Index ($38; PESPX)
1.2
B
0
0
62
Dreyfus Small Cap Stock Index
($29; DISSX)
1.6
B
0
0
92
Homestead Small Company
($40; HSCSX)
0.9
B
5
6
92
iShares MSCI EAFE Small-Cap ETF
($50; SCZ)
7.4
A
4
6
95
PRIMECAP Odyssey Stock ($24; POSKX)
3.4
A
10
10
91
T. Rowe Price Divers. Small-Cap Growth
($27; PRDSX)
5.2
A
7
7
96
T. Rowe Price Value
($34; TRVLX)
(1.1)
C
10
11
77
Thompson Bond ($11; THOPX)
(0.2)
E
9
4
35
Vanguard 500 Index ($192; VFINX)
2.8
B
7
8
80
Vanguard GNMA ($11; VFIIX)
0.9
B
0
0
97
Vanguard Growth Index
($56; VIGRX)
5.6
C
10
11
81
Vanguard High-Yield Corp. ($6; VWEHX)
0.9
A
5
6
98
Vanguard Inter.-Term Tax-Exempt
($14; VWITX)
1.4
B
0
0
92
Vanguard Selected Value
($28; VASVX)
(0.6)
B
5
8
73
Vanguard Short-Term Invest.-Grade
($11; VFSTX)
1.2
A
0
0
98
Vanguard Total Bond Mkt. Index
($11; VBMFX)
0.2
C
0
0
72
Vanguard Wellesley Income
($25; VWINX)
1.4
A
0
0
99
Vanguard Wellington ($39; VWELX)
1.2
B
10
10
96

* Year-to-date ranks through Nov.10 from Morningstar, comparing performance among funds with same objectives. A = top 20%; B = next 20%; C= middle 20%; D = next 20%;
E = bottom 20%. † Fund ratings are percentile ranks based on our fund-rating system.


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