Understanding that I'm not very good with knowing when to get in or out of the market, I've evolved to a portfolio that basically has funds that either are well diversified or have proven managers that weight the equity holdings in their funds based on their economic view. I was wondering if others are taking the same approach to portfolio building - using funds you are comfortable with as buy and hold.
Here is a list of the funds I've come to trust as long term funds, core funds if that word makes sense here. With these funds, I believe management has capital preservation first and foremost as their investing theme or the fund is well diversified in it's approach.
Equity funds:
YAFFX
ARIVX
UMBWX
ODVIX (new to my group thanks to BobC. one of the least volatile EM funds I've found.)
Allocation or Balanced type funds:
FPACX
PRPFX
PGDPX
MACSX
I also own FAAFX in this space but conservative it is not.
And the Bond side:
MWTRX
RPSIX
LSBRX
FGBRX
These funds are the bulk of my 401k and the ones I have become comfortable with. What funds do others have a high comfort level with through thick and thin?
Comments
I think others will have more thoughts on stock funds and bond funds but I just wanted to comment on REITs, which have been a part of my portfolio for a long time. I have tried a few funds but the only one that I have stuck with is the good ol' index, VGSIX. However earlier this year, I found an alternative in PRRSX, which is Pimco's derivative-pumped version of a REIT index fund.
Lastly I now have a significant holding in PAUIX, which I think of as a "true" buy-and-hold in the sense that I am trusting the manager to handle all of the underlying allocation for me (much like one of those all-in-one target date retirement funds).
APPLX
MAPIX
MAPTX
MSMLX
PRPFX
Long term bond fund holds:
LSBRX
PEMDX
Added in 2012:
MFLDX (Likely to be sold when it goes load)
PAUDX
MAINX
CYS
FHY
FCG
IGR (I tend to trade in and out of this)
MOO (I tend to trade in and out of this)
Regards,
Ted
YACKX + YAFFX
AKREX
ARIVX
FLPSX
ARTKX
FMIJX
Allocation/Mixed Asset:
GLRBX
PRPFX
FRIFX
Note: I have some smaller fund positions that I've actually held much longer than some of these but currently these are my largest allocations which I hope to hold for long term. When investing in managed funds definition of long term is a bit fuzzy.
I use PONDX as my "buy into" / "sell out" of fund. It is the fund where money settles when I sell shares of another fund (periodic profits or liquidations). It is the fund that I dispersed funds to buy new shares of other funds. It is the fund that receives distributions (dividends) from other funds. Instead of using a 50 or 200 dma as a buy and sell signal I use PONDX and chart all of my other funds against it. I judge all other funds I own against PONDX. I consider over performance and under performance based on how these fund perform with reference to PONDX.
PONDX is a consistent income fund and there are probably many others out there.
So, in a sense, it is the fund I buy and hold for the long term.
These are the funds I own:
Account 1
OAKBX
FPACX
PRWCX
AUXFX
FLPSX
FCNTX
ARTQX
ARTKX
ARIVX
MAPIX
BJBGX
FSICX
Account 2
FPACX
JPVTX
MAPIX
ARTGX
Account 3
OAKBX
PQIDX
MACSX
FMIOX
401k
JABAX
DODIX
PNEAX
AEPGX
FLMVX
IYMIX
SSMVX
FCNTX
LSBDX
POAGX
TPINX
ARTQX
ARTKX
Started in 2007 -
vanguard start vgstx
vanguard prime cap fund
prpfx since 2009
I personally like vht - vanguard health care index
Many vanguard investors also like the Wellington fund
regards
1. SGIIX (mega AUM but still delivering, SGENX/SGOVX available NL/NTF at Schwab)
2. PAUIX (mega AUM $20B and pricy 1.42% ER but delivering; PAUDX has a whopping ER of 1.82% and I would never, ever buy a "D" class of any PIMCO fund as the "I" class is available for a reasonable minimum at TDA and Scottrade; always look at the ER you are actually paying and don't trust the M* expense data)
3. PGDIX (low expense access to a mix of asset classes that are poorly correlated with each other, great U/D capture ratios in all periods that I have studied)
4. Risk Parity Funds: ABRIX and AQRIX (low expenses, poorly correlated with all asset classes that I have studied at assetcorrelation.com, nice performance, along with PAUIX these RP funds are the core of my "alternative" allocation)
5. MFCFX/HAFLX (prefer the lower cost HAFLX which we own, aggressive but great U/D capture ratios in all periods that I have studied, surprisingly low AUM for a fund with such performance)
6. TTRZX/GIM (MH has had great LT performance and I am sticking with him, he is aggressive and very smart)
(OT: BIP continues to be a sticky stock for me)
Disclosure: we own all of the assets listed above, and I am not recommending their purchase to anybody. Please do your own careful due diligence before making any investment.
Kevin
Hi K-dow,
Thanks for your comments and list. I noticed that Invesco offers a retirement fund that has an expense ratio of .25 and invests solely in ABRIX. The fund ticker is TNEAX...looks like an even lower ER than ABRIX.
From Fundmojo:
"Invesco Balanced-Risk Retire 2050 A Fund seeks to provide total return with a low to moderate correlation to traditional financial market indices. Invesco Balanced-Risk Retire 2050 A Fund is a "fund of funds" and invests assets in other mutual funds. It has an approximate target asset allocation of 100% in the AIM Balanced-Risk Allocation Fund, as of April 30, 2010, until approximately 10 years prior to the fund's target retirement date at which time the fund will begin transitioning from an accumulation strategy to a real return strategy. Invesco Balanced-Risk Retire 2050 A Fund is designed for investors whose target retirement date is in or about the year 2050. It is non-diversified"
http://www.fundmojo.com/mutualfund/fund_report/mutualfund/TNEAX
TNEAX is available through USAA brokerage for a minimum of $250. Funny thing...this note appeared just as I placed my order...
"We are unable to process the order referenced above. This fund is not available for purchase by residents of your state."
Other comments:
Looks like Marisco manages Harbor's fund but Harbor has a higher minimum hurdle ($50K with an ER of 1%) vs MFCFX ($2500 with an ER of 1.27%).
I pay a TF fee to buys TGBAX (ER=.63). TTRZX is NTF at my brokerage with an ER=.79%. As a strategy, I buy small amounts of TTRZX often and then once a year I have a scheduled transfer to TGBAX. Because it is scheduled there is no TF fee. I assume this would work in the other direction if someone where to be in retirement and selling out of shares.
Thanks for you ER points.
As for PEMDX, well, thats an emerging markets bond fund and its really not directly comparable. If, however, you compare this fund to the Doubleline offering DBLEX there's not much that separates the two nor is Gundlach the lead manager.
Seconded on BIP - that is a large and long-term holding for me and has done extremely well (and pays a very nice dividend.) Also highly agree with your fund choices.
RNSIX
EXDAX
VWINX
RPHYX
OAKBX
FPACX
PRPFX
MACSX
I don't have any pure equity funds which are B&H. I have recently started a position in HDV, which is a dividend ETF. It does not have a long history, but I intend to hold it for a long time (unless it disappoints
TNEAX is waiving all fees except its 12b-1 fee (0.25%) until "at least April 30, 2013". But this waiver doesn't include waiving the fees of the acquired funds (0.87%), so even with the waiver in place, the total ER is 1.12%. This is what's reported in the summary prospectus, and what M* reports.
Thanks for the information...wonder if there is any way around the $1,000,000 minimum for ARBIX?
Available TF at Fidelity w/$500 min
Easy first. You would probably enjoy the article by Steve Goldberg entitled "Goldberg's Picks: 5 Best Low-Risk Stock Funds."
Here is link: http://www.kiplinger.com/columns/value/archive/goldberg-picks-best-low-risk-stock-funds.html
The five are: Sequoia Fund (symbol SEQUX), T. Rowe Price Capital Appreciation (PRWCX), Forester Value (FVALX), FPA Crescent (FPACX), and First Eagle Global (SGENX).
All but FVALX have outperformed SP500 the past decade:
Honestly, Goldberg is not afraid to take a stand and explains why in simple terms. He has some similar articles on bond and allocations funds. I first became impressed with him after reading his article questioning Bruce Berkowitz's heavy move into financials in late 2010.
Here is link to that insightful article:
http://www.kiplinger.com/columns/value/archive/kiplinger-25-fairholme-funds-big-bet-on-financial-stocks.html?si=1
I like Bee's suggestion that you assess any gain/risk fund decision against a standard like PIMCO Income Fund PONDX. (Or, PIMIX, its institutional equivalent.)
I see Oakmark Equity & Income (OAKBX) and FPA Cresent (FPACX) suggested by several on the allocation side. Both have done great this difficult decade, although I believe are closed to new investors. I remember when Dodge & Cox Balanced Fund (DODBX) was in same category, until it got slammed in 2008. It still beats SP500 over the long haul, and I want to believe it learned from its mistake and will be stronger going forward. That said, Vanguard Wellington (VWELX) admirably did not stumble and remains a buy-and-hold choice open to new investors, as pointed out by JohnN.
In fact, all of these allocation funds have also beat SP500 this decade:
An under-the-radar equity fund is Auxier Focus (AUXFX), which I first read about on FundAlarm, has consistently done well and is just now starting to get recognized.
Note that all of Goldberg's picks and the ones I've mentioned above have less volatility than SP500. A couple, like Forester Value and Oakmark Equity, are substantially less volatile. So, it's easy to see why these are comfortable buy-and-hold picks.
OK, now for tougher part.
In 1974, Berkshire Hathaway (BRK.A) lost nearly half its value...in one year! BRK.A has more than twice the volatility of SP500. But who would not have wanted to own this stock for the last 41 years, where it has gained more than 20% annually? (Granted, not a mutual fund proper, but it represents the best in equities...let's call it a surrogate mutual fund.)
Other examples of higher volatility funds that have never lost more value in any three-year period than SP500's worst...but have made substantially more money over the long term: Vanguard Health Care (VGHCX), FMI Focus (FMIOX), Fidelity Select Consumer Staples (FDFAX), Artisan Mid Cap (ARTMX), and Vanguard Energy (VGENX). All represent excellent buy-and-hold picks, but you really gotta be willing to hold after that one really bad year.
One last thing: You list good choices. But for what it is worth, I personally do not like to own more than 4-5 funds at one time. Currently, I own: RNSIX, FAAFX, FAIRX, SFGIX, and DODBX.
We're holding the same hands, rnsix, vwinx, rphyx. I was introduced to rnsix, rphyx here at this forum for which I'm grateful, professor Snowball is on somewhat of a roll. Rphyx to address interest rate risk, something of a keen and to date mistaken concern for years. I tried a couple of real return multiasset funds launched by Doubleline and Loomis Sayles, both dismally failed to achieve their complex trading strategy objective of Libor plus a couple percentage points and were rolled into rnsix which succeeds with a gentle upward bias in up, down or sideways markets instead of down, down and down. That's a chunk of risk in a single fund somewhat lessened by three differing subportfolios managed by two separate fund groups. I've mentally reclassified rnsix as an alternative investment class because it actually accomplishes what real return funds propose to.
http://finance.yahoo.com/q/bc?t=1y&s=RNSIX&l=on&z=l&q=l&c=MARYX+DMLIX&ql=1
Favorite buy and hold, VWINX FGBLX, consistent base hitters. Wellesley Income consolidates large cap blue chip dividend payers, a market sweet spot of late with intermediate term investment grade bonds. Fidelity Global Balanced congeals about four funds for diversification, 60/40 stocks/bonds, 50/50 domestic/int'l, dollar/nondollar, meeting or (scantly) exceeding its benchmark over trailing time frames ( MSCI World Index and the Citigroup World Govt. Bond Index using a weighting of 60% and 40%.)
Despite high turnover and the 1% expense ratio the team management somehow earns their keep. Also holding ffnox, Fidelity Four-in-One a cheap fund of index funds. These three funds, vwinx-fgblx-ffnox easily replace a dozen or more fund exposures in a world that is sadly ever more correlated anyway.
off-topic--watched all three parliamentary hearings of the grilling of the deposed Barclay's ceo,
chairman and the BOE contact and also the two Congressional inquiries of Mr. Dimon.
The English are so much better at english, packing a freightload of subtly and nuance into a single exquisitely crafted phrase with precision of meaning without hesitation.
The contrast, parliament/congress, was as a searing bbq to a marshmallow roast.
A differing view of the Libor mania--
http://brucekrasting.blogspot.com/2012/07/bloodletting.html
http://pragcap.com/why-is-no-one-freaking-out-about-the-libor-scandal
Interest rate manipulation, the real point--
http://www.cnbc.com/id/48167868
addendum--
The 4th parliamentary hearing, grilling the former Barclay's COO today.
As with any parliamentary or congressional hearing into past and present fiascos, whether an MF Global,
Lehman's, Moody's or JPM...Sgt. Schultz defense...saw nothing, knew nothing
when not pleading the 5th. I actually believe them, they didn't. Which is, if one
follows these show trial things going back to, say, the S&Ls..is the more condemning
but not most condemning. Most belongs to the inquirers who for decades revisit this Ground Hog Day of private gains/socialized losses and yet see nothing, know nothing.
http://www.parliamentlive.tv/Main/Player.aspx?meetingId=11255&wfs=true
Couple of comments; I've heard Bee describe her method of comparing funds to PONDX. Using this fund to buy into and sell out of other funds seems like a nice idea, but I guess I don't quite get the idea of bench marking all other funds to PONDX. But if it's working for her I think that's great.
The benchmark I'm using is to compare my total portfolio returns to see if I'm getting adequate return for the portfolio's risk (measured by standard dev). My goal is to get the same or better returns then the TRP target fund, TRRAX, with less risk. TRRAX has the standard 60% equity/40% fixed income allocation.
On your 'tougher part'. I see your point. Using more volatile funds can also be rewarding over time. I do use a couple more volatile funds, FAAFX as an example. But I still keep the total portfolio risk in check - lower stdev then my benchmark.
PS. Let's hope MBIA and BAC settle, which I trust will generate big up-tick for FAAFX, FAIRX...and BB.
Hey Charles and Mike M,
Bottom line...investing incurs risk.
PONDX is my "get a good night sleep" fund. You might have another...there are probably many. When other funds I hold outperform PONDX I try to take profits during their out performance phase. Profits go under my pillow (and into PONDX). When these other funds shows signs of under performing relative to PONDX I monitor them.
I might:
-replace a fund I own with a less volatile peers or,
-move out of a fund into PONDX all together or on a percentage basis (sort of a sell stop strategy) until I see these funds tread upwards again or,
-dollar cost average into a new fund that I don't own but, which appears to be a "good buy" verses PONDX when charted together.
There's a discipline here that works for me. Rono often used the analog of a mountain and the many paths one can take up the mountain. My funds are like individual mountain climbers and hikers. Mountain climbers scale the sides of the mountain and use rope...my hikers follow a trail and carry most of the supplies. The mountain climbers scale the sides of the mountain. Their risky success allows me to realize some of their profits more quickly. For every 10% up the side of the mountain that the successful mountain climber funds achieve I try to leave that profit (extra length of rope) on the trail for PONDX to pick up. The rope is stored in the backpack of a fund like PONDX. PONDX walks the slower...safer path still moving up the mountain always ready to help the climbers above (by collect profits...rope) and below (throw down some rope...reallocating). One of PONDX's purposes is its ability to throw down profits to long term fund holdings that have temporarily slipped. As these funds regain their footing they hopefully excel up the mountain surpassing PONDX's slow steady progress and the process repeats itself.