Our Fund Portfolios OutPerform

12/21/2009


 

Fund investors should feel good about 2009 — all major U.S. stock-fund categories have posted double-digit returns so far. Meanwhile, all but one general bond fund category (long-term government) has advanced. Through Dec. 15, our recommended Growth Portfolio gained 31.7%, versus an increase of 26.2% for its passive benchmark portfolio and a return of 25.6% for the S&P 500 Index. The Conservative Portfolio gained 24.5%, compared to a gain of 21.2% for its benchmark.

The Forecasts is making a handful of changes to enhance performance:

Stock exposure for the Growth Portfolio is being trimmed slightly, while the Conservative Portfolio will have a slightly higher weighting, particularly in foreign stocks.

Baron Asset ($45; BARAX) scores poorly in our fund-ranking system and is being dropped from both portfolios. American Century Heritage ($16; TWHIX), a standout midcap growth fund, is taking its place.

Northern Small Cap Value ($12; NOSGX), with its weak fund score and poor relative performance, is being dropped from coverage.

Vanguard Total International Stock Index ($15; VGTSX) is being added to both portfolios.

Subscribers can find our 20 favorite funds listed below. On page 10, we list 72 standouts selected using our fund-ranking system. The average score across the 72 no-load funds is an impressive 91, and nearly 60 score above 80. Rankings for more than 3,600 funds — computed monthly using total returns, expense ratios, and tax efficiency — are available in the Subscriber Area at DowTheory.com/go/FundRanks.

 

FORECASTS FUND PORTFOLIO PERFORMANCE
—————————————————————————————— Total Return ——————————————————————————————
1998
(%)
1999
(%)
2000
(%)
2001
(%)
2002
(%)
2003
(%)
2004
(%)
2005
(%)
2006
(%)
2007
(%)
2008
(%)
2009 *
(%)
Growth Portfolio
15.6
31.5
-5.4
-8
-20
39.4
16.7
11.5
14.9
11.3
-42.7
31.7
Benchmark
20.4
25
-11.2
-13
-17.8
31
13.6
7.6
17.3
7.6
-38.3
26.2
Conservative Portfolio
15.9
22.2
-4.3
-7.9
-13.4
30.6
13.7
8.8
12.4
9.9
-33.6
24.5
Benchmark
17
18.9
-5.8
-8.1
-10.9
24.4
11.5
6.6
14.5
7.8
-28.2
21.2
Returns exclude taxes and transaction costs. 

 

FORECASTS FUND RECOMMENDATIONS
– Portfolio Target Weight –
—— Total Return & Category Rank ——
Fund (Price; Ticker)
Objective
Conser-
vative
Growth
YTD
(%)
Ann.
3-Year
(%)
Phone No.
(800)
American Century Heritage
($16; TWHIX)
Midcap growth
7
8
34.8
C
1.7
A
345-8765
Dreyfus Small Cap Stock Index
($16; DISSX)
Small-company blend
0
0
21
D
-6.1
C
645-6561
Fidelity Export & Multinational
($19; FEXPX)
Large-company growth
7
8
35.8
B
-4.4
C
544-8888
Fidelity Leveraged Co. Stock
($23; FLVCX)
Midcap blend
0
0
56.7
A
-6.4
C
544-8888
Heartland Select Value
($25; HRSVX)
Midcap value
6
7
36.5
B
-1.01
A
432-7856
Heartland Value Plus ($23; HRVIX)
Small-company value
7
7
23.1
D
1.54
A
432-7856
T. Rowe Price Int’l Discovery ($37; PRIDX)
Foreign small company
5
5
55.2
A
-2.8
A
638-5660
T. Rowe Price New Horizons ($25; PRNHX)
Small-company growth
7
8
40.4
A
-3.3
A
638-5660
Vanguard 500 Index ($103; VFINX)
Large-company blend
5
5
25.6
C
-6.1
C
662-7447
Vanguard Dividend Growth ($13; VDIGX)
Large-company blend
8
10
21.9
D
-1.1
A
662-7447
Vanguard Emerging Mkts. Stock Indx.
($26; VEIEX)
Emerging markets
0
5
73.5
B
5.1
B
662-7447
Vanguard GNMA ($11; VFIIX)
Government bonds
5
0
6
B
6.7
A
662-7447
Vanguard Inter.-Term Tax Exempt
($14; VWITX)
Municipal bonds
0
0
10.3
C
4.4
B
662-7447
Vanguard International Value ($31; VTRIX)
Foreign large-company value
7
5
33
B
-4.3
A
662-7447
Vanguard Short-Term Invest. Grade
($11; VFSTX)
Short-term bonds
0
0
14.2
A
4.8
B
662-7447
Vanguard Total Bond Mkt. Index
($10; VBMFX)
Intermediate-term bonds
20
0
6.7
E
6.1
B
662-7447
Vanguard Total Int’l Stock Index
($15; VGTSX)
Foreign large-company blend
5
5
35.6
B
-4.1
B
595-9111
Vanguard Wellesley Income ($21; VWINX)
Balanced — 60% bonds
0
10
16.2
D
3.4
A
662-7447
Vanguard Wellington ($29; VWELX)
Balanced — 60% stocks
5
10
22.2
C
0.8
A
662-7447
Wells Fargo Advantage High Income
($7; STHYX)
High-yield bonds
6
7
32
E
3.8
C
222-8222
* Rankings and returns through Dec. 15, from Morningstar.   A = top 20%; B = next 20%; C = middle 20%; D = next 20%; E = bottom 20%.   Conservative benchmark = 45% Vanguard Total Stock; 30% Vanguard Total Bond; 25% Schwab Int’l Index.   Growth benchmark = 67% Vanguard Total Stock; 6% Vanguard Total Bond; 27% Schwab Int’l Index.   C Closed.

 

 

TOP RANKED FUNDS IN 36 CATEG
———Returns * ———
Category
Fund (Price; Ticker)
Fund
Rank †
YTD
(%)
3-Year
(%)
Expense
Ratio
(%)
Balanced — Bond Bias
Berwyn Income ($13; BERIX)
94
29.8
7.5
0.73
•
Vanguard Wellesley ($21; VWINX)
88
16.5
3.5
0.25
Balanced — Stock Bias
Janus Balanced ($25; JABAX)
100
23.7
4.8
0.79
•
Vanguard Wellington ($29; VWELX)
99
22.7
1.0
0.29
Diversified Emerging Mkts
T. Rowe Price Emerg. Mkts. ($30; PRMSX)
77
85.3
2.5
1.24
•
Vanguard Emerging Mkts. ($26; VEIEX)
93
74.8
5.4
0.32
High-Yield Bond
Fidelity Capital & Income ($9; FAGIX)
100
68.9
6.1
0.78
Neuberger Berman High Inc. ($9; NHINX)
96
49.2
7.3
0.92
Inflation-Protected Bond
American Century Infl.-Adj. ($12; ACITX)
100
11.0
6.3
0.49
Vanguard Infl.-Protected ($13; VIPSX)
79
11.3
5.9
0.20
Intermediate-Term Bond
Dodge & Cox Income ($13; DODIX)
98
16.3
6.7
0.43
Old Westbury Fixed Inc. ($12; OWFIX)
95
3.6
7.6
0.70
Intermediate-Term Government
Fidelity Ginnie Mae ($11; FGMNX)
99
7.9
7.2
0.45
•
Vanguard GNMA ($11; VFIIX)
86
6.2
6.8
0.22
International — Large-Cap Blend
Scout International ($29; UMBWX)
99
34.8
(0.4)
1.02
•
Vanguard Total Int’l ($15; VGTSX)
97
36.7
(3.9)
0.34
International Large-Cap Growth
T. Rowe Price Int’l ($13; PRITX)
76
51.8
(3.4)
0.87
USAA Int’l ($23; USIFX)
72
32.4
(2.1)
1.31
International Large-Cap Value
Dodge & Cox Int’l ($32; DODFX)
100
47.3
(3.8)
0.64
•
Vanguard Int’l Value ($31; VTRIX)
98
34.1
(4.1)
0.42
International Small & Midcap Growth
•
T. Rowe Price Int’l Disc. ($37; PRIDX)
76
56.3
(2.6)
1.24
Wanger Int’l ($30; WSCAX)
94
49.3
(0.9)
1.02
International Small & Midcap Value
Artisan Int’l Value ($24; ARTKX)
83
33.4
(2.3)
1.23
Tocqueville Int’l Value ($11; TIVFX)
67
37.5
(2.8)
1.56
Large-Cap Blend
Fairholme ($30; FAIRX)
100
38.0
2.5
1.01
•
Vanguard Dividend Growth ($13; VDIGX)
99
22.4
(0.9)
0.36
Large-Cap Growth
Parnassus ($34; PARNX)
91
44.9
(0.6)
0.99
Wells Fargo Adv. Growth ($25; SGROX)
96
43.6
2.2
1.40
Large-Cap Value
Becker Value Equity ($12; BVEFX)
99
25.9
(3.6)
0.99
Yacktman ($15; YACKX)
99
59.4
6.8
0.95
Midcap Blend
•
Fidelity Leveraged Co. ($23; FLVCX)
87
57.3
(6.3)
0.92

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