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Tom Madell and Lynn Bolin articles

Rickrmf
in Fund Discussions
Tom's recent article in SA, and Lynn's article in this month's Commentary, were consistent in their thoughts for 2023. Thanks to both for these articles, as I found them informative and helpful as I think about making some portfolio adjustments moving forward. Takeaways... bonds are looking more attractive; caution with equities with an eye on recession probabilities; foreign over domestic; value over growth. Sorry, I wasn't able to successfuly post links.

My thoughts for my portfolio: begin to shift some equity$$$ into balanced funds or bond funds; DCA from cash mmkt into foreign value. Intrigued by AVGE, but wish it had better volume. Tracking it, as I love its holdings as noted by Lynn.

Thanks again to both authors!
Rick

Comments

  • MikeW
    Hi Rick… thanks for noting Tom’s article. Will try and find it. I’ve been researching funds along these same lines. I’m intrigued most by SIVLX and also VZICX to date. Please let me know what else you find
  • MikeW
    These are foreign value and foreign blend
  • MarkMark
    edited February 2023
    Tom Madell article Vanguard ETFs: Recommendations For 2023

    And a comparable article from Forbes 7 Best Vanguard ETFs of 2023
  • MikeW
    Thanks @Mark
  • Rickrmf
    MikeW, funds both authors like include Vanguard Global Wellington/Wellesley. It was suggested to look at balanced/target funds with a value/global tilt. I'm not at Vanguard, and have not found better Global Balanced fund alternatives that have similar tilts. Lynn made a compelling case for Avantis, AVGE, with its value, SC, and foreign holdings, and within its 10 fund holdings, numerous Great Owls...perhaps paired with some bonds as a DIY balanced fund. I'm somewhat concerned about its low volume.
  • yogibearbullyogibearbull
    edited February 2023
    Global hybrids are difficult to find. Two good ones are SGENX & TIBAX, both no-load/NTF at Fido & Schwab. TIBAX also has an unleveraged CEF cousin TBLD that can be bought anywhere.

    BTW, Fido used to have a global-balanced fund but it was discontinued (really merged away).

    VG Wellesley VGWIX and VG Wellington VGWLX are good entries too.

    Many target-risk & target-date funds have 30-40% international now.

  • Sven
    edited February 2023
    @yogibearbull,

    Are all these funds currency hedged or not? Sometime it is tough to tell from the annual reports.
  • Observant1
    edited February 2023
    The statement below was found in the VGWIX and VGWLX prospectuses.
    Hedging equity currency exposure was not mentioned.
    Many foreign equity funds do not hedge currencies at all or in any meaningful way.

    "With respect to local currency bonds, the Fund may attempt to hedge its foreign currency exposure, primarily through the use of foreign currency exchange forward contracts. Such hedging is intended to minimize the currency risk associated with investment in bonds denominated in currencies other than the U.S. dollar."
  • Sven
    In the past I invested in Franklin Mutual Discovery fund and FMI International fund. Both are currency hedged funds.

    MDISX. The Fund regularly attempts to hedge (protect) against currency risks, largely using currency forward contracts and currency futures contracts (including currency index futures contracts) when, in the investment manager’s opinion, it would be advantageous to the Fund to do so. The Fund may also, from time to time, attempt to hedge against market risk using a variety of derivatives.

    If the Vanguard funds invest in local currency bonds, there is no need to use forward contracts to hedge foreign currency exposure. In general the hedging practice incur additional cost and that reflects in the expense ratio. FMI now offers an unhedged version of FMIJX.
  • Observant1
    edited February 2023
    I'm also a past FMIJX investor.
    The fund was sold after my Roth IRA was transferred to a different brokerage firm several years ago.
    I generally prefer unhedged foreign equity funds but favor hedging foreign bonds.
  • msf
    yogibearbull said:

    Global hybrids are difficult to find. Two good ones are SGENX & TIBAX, both no-load/NTF at Fido & Schwab. TIBAX also has an unleveraged CEF cousin TBLD that can be bought anywhere.

    The cheaper TIBIX share class can be purchased (with a TF) in a Fidelity IRA with a $2500 min. It can be worth the fee if you're planning to hold the fund for a few years. And via Fidelity's automatic investment system, it should be possible to buy additional shares with just a $5 fee.

    Fidelity comparison of TIBIX and TIBAX
  • Sven
    @msf, thanks to your advice. I have gotten into several institutional MFs with a transaction fee while at a lower minimum. Adding more later with Fidelity’s automatic feature for $5 works well. Vanguard brokerage still requires $1M minimum. Still pondering on this fund.
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