All, I had found this site a long time ago and have been deriving good advice from it ever since. Am requesting advisement on investment opportunities for my 401k. Currently, I have many large cap funds and would like to pare them down some. My choices were driven either by investment firm managers I was following, or by lucrative dividends and income potential, or by my affinity for new funds. Some funds I have had for years; others, not very long. Some I maintain a toe hold in; others carry a more significant balance. In short, I need advice on how to consolidate across the board so that my portfolio becomes more focused. (My 401k is a Fidelity Brokerage Account.) All comments, please. Thank you in advance for your help. My current holdings are: AVEDX, BUFDX, CHDEX, DGAGX, EPCNX, FSDIX, GABAX, GABEX, GEVSX, LCEIX, MDFSX, PRBLX, SDVSX, SOPAX, STRAX, TOCQX, YAFFX.
Comments
1. In many of your funds, the paltry dividend they offer is offset by their higher-than-average expense ratios. Makes no sense to me.
2. Many of these funds are too new for me to consider owning. Specifically, without knowing how a fund will perform in a bear market, e.g., 2007 through March 2009, I cannot own it.
3. Your have overlooked the forest (overall performance and total return) for the dividend tree. Several of your funds are dogs which have greatly underperformed.
4. Several of your funds suffered steep declines e.g., FSDIX -41%, GABAX -37%, etc., during the bear market year of 2008. What good is a 1.5% dividend if it takes your fund 4 to 5 years to recover from a steep drawdown during a bear market?
All that said, I believe the best of the funds you have listed are: AVEDX, PRBLX, and YAFFX. Frankly, you can toss the rest of them and consolidate them into these three funds.
Ironically, you do NOT own three of the best large cap funds available, funds which sustained modest losses in 2008, give excellent performance in bull markets, and have provided stellar returns for over a decade. If you feel the need to own more than three mutual funds, I would consider:
AMANX: Amana Income
BPAVX: Robeco Boston Partners All-Cap
MVPFX: Marathon Value
My overriding point: think more about total return over a long period of time, one which encompasses a bear market, and less about paltry dividends of 1% to 1.5% in your mutual funds.
One thing you might do is look at morningstar for the top 25 stocks in each fund. That might help you decide how to consolidate.
Oh I'd say your portfolio is very focused now. Focused on just one investment type. Has it been your choice not to have a diversified portfolio, or have you just fallen into non-diversification while chasing dividends?
In any case, I'll suggest the obvious. I would suggest you pare down the Lcap holdings to maybe 2 or 3 and pick up some small cap and International/emerging market exposure - and bonds, Maybe a couple good total return or multisector bond funds and have some Int/EM bond exposure. PIMIX, OSTIX, LSBDX, MWTRX, HRBDX, FGBRX are some bond suggestions. If you want a fund that focuses on dividend return using a diversified allocation, not just stocks, I would suggest PGDPX.
You actually have a few pretty good LC funds. YAFFX and PRBLX are a couple of my favorites. If you chose either or both of those funds, I might diversify your Lcap further with a growth fund like POGRX. Plenty of good small caps to choose from. You can start your search by looking here at MFO at David's lists. I recently added GPGOX after hearing about it here.
I don't know your age, risk tolerance or investing style, so just the general diversification observation is all I can give.
EM bonds: FNMIX or PREMX
International: MACSX, MAPIX , SFGIX. (The first two are all Asia. SFGIX is run by a Manager who did very well for Matthews, but left to start his own shop: Andrew Foster.)
Domestic bonds: DLTNX, MWTRX, MWHYX.
I want to recommend MAPOX, too. It is balanced, holding both equities and bonds. The bonds will hold it back from ever blazing a trail at the head of the pack, but the bonds will help to moderate losses during downdrafts.
Here's what I own, and I am heavily overweight in International/Global, not enough in the domestic area:
DLFNX (dom. bond, pays monthly)
MAPOX (balanced, pays quarterly)
MSCFX (small-cap, pays at year-end)
MAPIX (Asia, pays quarterly)
MACSX (Asia ex-Japan, pays June/December)
MAINX (Asia bonds, pays quarterly)
SFGIX (Global, still mostly Asia, pays June/December.)
TRAMX (Africa/Middle East, pays year-end)
PREMX (Emerg. Mkt. bonds, pays monthly.)
My next move will be to add another domestic equity fund, soon. i need to reinvest a bond maturing on July 1st. ... I have been in here gathering opinions, suggestions. Parnassus Equity PRBLX has been mentioned, as well as YACKX. I feel like I will be holding too many funds, but along the way, circumstances don't always unfold neatly and on time. My holdings amount to something over 6 figures, barely. Don't diversify so much that you end-up just diluting the profits you COULD have had. OK, "break a leg."
Jerry, on the company side of my 401k, I have my three (3) largest holdings: Vanguard's VINIX (S&P 500), VIEIX (Mid CAP), VIDMX (Developed Markets Index). As far as internationals, FGILX, MACSX, MAPIX, PTHDX and SGIDX round out the mix.
Sorry, Mike, it's just too much to put down at first----my bad. As far bonds, I have none right now having sold them on advice from CNBC and others. Also have small and mid: APPLX, CHTTX, FSCRX, FSSPX, RYDVX, STDIX, UMBMX, WASIX.
So, Max, this is it for my current portfolio. I am going to check out your funds. Also, thank you to all again. I know I need bonds. I expect to hear a lot of guff for this, and I understand. Have started this brokerage journey in 2009, so it's relatively new to me. That's why I need help. Thanx.