Vanguard, Fidelity Funds In Spotlight

11/16/2009


Vanguard and Fidelity rank No. 1 and No. 3 respectively in mutual-fund assets, managing a combined $1.7 trillion. The two firms oversee more than one-quarter of all assets in U.S. mutual funds.

Naturally, many subscribers have money at one or both of these giants, both of which charge hefty fees for purchasing funds from the other family. Those investors may wish to consider the all-Vanguard or all-Fidelity portfolios listed in the table below.

ALL-VANGUARD OR ALL-FIDELITY PORTFOLIOS
Portforlio Target
——— Weight ———
General Category
Conser-
vative
(%)
Growth
(%)
Vanguard Funds (Price; Ticker)
Annual
Expenses
(%)
Fidelity Funds (Price; Ticker)
Annual
Expenses
(%)
Balanced — bond bias
0
7
Vanguard Wellesley Inc. ($20; VWINX)
0.33
Fidelity Asset Mgr. 20% ($12; FASIX)
0.56
Balanced — stock bias
9
10
Vanguard Wellington ($29; VWELX)
0.35
Fidelity Balanced ($16; FBALX)
0.68
Emerging markets
0
5
Vanguard Emerging Mkts. ($26; VEIEX)
0.39
Fidelity Emerging Markets ($22; FEMKX)
1.07
Foreign large value
8
9
Vanguard Int’l Value ($32; VTRIX)
0.47
Fidelity Spartan Int’l Index ($34; FSIIX)
0.20
Foreign small company
5
7
Vanguard Int’l Explorer ($14; VINEX)
0.42
Fidelity Int’l Discovery ($30; FIGRX)
1.09
Government bonds
6
0
Vanguard GNMA ($11; VFIIX)
0.23
Fidelity Ginnie Mae ($12; FGMNX)
0.45
High-yield bonds
7
5
Vang. High-Yield Corp. ($5; VWEHX)
0.32
Fidelity Capital & Income ($8; FAGIX)
0.78
Intermediate-term bonds
20
0
Vang. Total Bond Mkt. ($10; VBMFX)
0.22
Fidelity Total Bond ($11; FTBFX)
0.45
Large-company blend
7
7
Vanguard 500 Index ($101; VFINX)
0.18
Fidelity Spartan 500 Index ($76; FSMKX)
0.10
Large-company blend
8
10
Vang. Dividend Growth ($13; VDIGX)
0.32
Fidelity Dividend Growth ($23; FDGFX)
0.62
Large-company growth
6
8
Vanguard US Growth ($16; VWUSX)
0.50
Fidelity Export & Multinat’l ($19; FEXPX)
0.91
Midcap growth
6
7
Vang. Mid Cap Growth ($15; VMGRX)
0.61
Fidelity New Millennium ($24; FMILX)
1.10
Midcap value
5
9
Vanguard Selected Value ($16; VASVX)
0.45
Fidelity Mid Cap Value ($12; FSMVX)
0.85
Small-company growth
6
8
Vang. Small Cap Growth ($16; VISGX)
0.28
Fidelity Small Cap Stock ($14; FSLCX)
0.96
Small-company value
7
8
Vang. Small Cap Value ($13; VISVX)
0.28
Fidelity Small Cap Disc. ($15; FSCRX)
1.13

The portfolios closely match our recommended Growth and Conservative portfolios. While it’s difficult to duplicate the precise objective or style of many funds, the selected funds tie off nicely.

The Vanguard and Fidelity offerings score well in our proprietary fund-ranking system. More than half of the 15 Vanguard funds rank among the top 20% of their category, while five Fidelity funds land in the top 20%.

Bigger is not necessarily better — neither Vanguard nor Fidelity offers the best funds in every category. That’s why the Forecasts recommends funds from several families. Still, the Vanguard and Fidelity portfolios represent solid picks for subscribers bent on one-stop shopping. Three Forecasts recommendations are profiled below.

Fidelity Export & Multinational ($19; FEXPX), a recommended fund since 2001, is a solid pick among large-cap growth funds. Despite a tough year in 2008, the fund still ranks among the top 2% of its category based on 10-year annualized returns. It invests in stocks expected to benefit from exporting goods.

Vanguard Dividend Growth ($13; VDIGX), which yields 2.5% and earns an impressive 98 in our fund-rating system, invests mainly in large-capitalization, high-quality stocks capable of generating dividend income that grows faster than inflation.

The Vanguard Wellington ($29; VWELX) fund, which opened its doors in 1929, is a good all-weather pick. The fund holds roughly 60% stocks and 40% fixed-income investments, with a slant toward high-quality securities. Boasting an impressive fund score of 95, Wellington ranks among the top 10% of its category for three- , five- , and 10-year performance.

FORECASTS RECOMMENDED PORTFOLIOS
Through Nov. 10, our recommended Growth Portfolio has gained 29.9% in 2009, while the Conservative Portfolio has increased 23.1%.
Portfolio Target
—–— Weight ——–
Fund (Price; Ticker)
Category
Conser-
vative
(%)
Growth
(%)
Baron Asset ($45; BARAX)
Midcap growth
6
7
Fidelity Export & Multinational
($19; FEXPX)
Large-co. growth
6
8
Heartland Select Value
($24; HRSVX)
Midcap value
5
9
Heartland Value Plus ($22; HRVIX)
Small-co. value
7
8
T. Rowe Price Int’l Discovery
($37; PRIDX)
Foreign small co.
5
7
T. Rowe Price New Horizons
($24; PRNHX)
Small-co. growth
6
8
Vanguard 500 Index ($101; VFINX)
Large-co. blend
7
7
Vanguard Dividend Growth
($13; VDIGX)
Large-co. blend
8
10
Vanguard Emerg. Mkts. Stk. Indx.
($26; VEIEX)
Emerging markets
0
5
Vanguard GNMA ($11; VFIIX)
Government bonds
6
0
Vanguard International Value
($32; VTRIX)
Foreign large value
8
9
Vanguard Total Bond Mkt. Index
($10; VBMFX)
Intermed.-term
bonds
20
0
Vanguard Wellesley Income
($20; VWINX)
Balanced —
bond bias
0
7
Vanguard Wellington
($29; VWELX)
Balanced —
stock bias
9
10
Wells Fargo Advant. High Income
($7; STHYX)
High-yield bonds
7
5

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