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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Artificial Intelligence (AI) Funds
    If you like AI and like Amazon then there is one fund which gives you considerable exposure. Fidelity's Select Retailing (FSRPX) which has a 24.5% weighting to AMZN. The fund manager recently stated she likes AMZN not only for its disruptive business model but also for its commitment to AI. (Disclosure: I own FSRPX)
  • Everyone Wants Cheap Tech, Consumer Discretionary ETFs Have It: (VCR)
    AMZN and NFLX are two out performers for VCR YTD. Results seem bifurcated with 12 of the top 25 holding with negative returns YTD.
    VCR covers this space with 371 holding (Top 10 holdings = 41% of fund), with a mere 6% turnover.
    FSRPX covers this space with a mere 44 holdings (Top 10 holdings = 71% of fund) and a 17% turnover. It also has large YTD returns from AMZN, NFLX, BKNG, AAP, and Prada, but again only half of the top 25 are positive for the year.
    Performance Comparison:
    image
  • Bespoke: How Can This Be The Best Performing Industry Group in the S&P 500? (FSRPX)
    FYI: In an earlier post looking at breadth among the different industry groups in the S&P 500, we noted that Retailing was the top performing group in the S&P 500 YTD with a gain of over 15%. Looking at the table below, however, you would have hardly guessed by looking at the performance of brick and mortar retailers in the S&P 500 on a YTD basis. Of the 25 individual brick and mortar companies listed, just nine are up YTD, and the average YTD performance of these stocks has been a decline of 0.77%. To be sure, there have been some winners with stocks like Kohl’s (KSS) and Macy’s (M) up over 20% and a total of five stocks up more than 10%. At the other end of the list, though, there are also five stocks down by double-digit percentages.
    The table below shows the YTD returns of all the stocks in the S&P 500 Retailing Industry Group. That includes all the names highlighted above plus the four non-traditional brick and mortar retailers in the group (highlighted in green). As shown, all four of the stocks not listed in the table above have seen stellar returns so far in 2018, with Netflix’s (NFLX) 67% gain leading the way higher. Right behind NFLX, Amazon (AMZN) has rallied over 30%, while Booking (BKNG) and Trip Advisor (TRIP) round out the top five. In this table, we have also included a column showing what each company’s market cap equals as a percentage of the industry group’s total market cap. By itself, AMZN accounts for almost 45% of the industry group, while NFLX accounts for another 8.4%. BKNG is no slouch either at 6.1% of the industry group’s total market cap. What’s really amazing about these four stocks is that together they account for just under 60% of the industry group’s total market cap, yet when you think retail, for most people they aren’t the first companies that typically come to mind.
    Regards,
    Ted
    https://www.bespokepremium.com/think-big-blog/how-can-this-be-the-best-performing-industry-group-in-the-sp-500/
    M* Snapshot FSRPX:
    http://www.morningstar.com/funds/XNAS/FSRPX/quote.html
  • Funds that Hung in there today (Last day of February 2018).
    Obviously a subject of scorn and ridicule with the rest of my portfolio, but please...amuse me.
    FSRPX UP!!! 0.15% -
    Top 25 actually looked pretty good for a down day (top 10 holding make up 71%...total of 44 holdings):
    image
  • The Chink in the Armor of Retail -$1T of HY Debt is coming due Across all Industries
    Retail only makes up 2% of the $1T of HY debt maturing over the next 5 years, but as an prior owner of FAIRX (large holding of SHLD) and an investor in FSRPX I've been paying close attention to Retail.
    Why is Retail Struggling?
    The root cause is that many of these long-standing chains are overloaded with debt—often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder—even for healthy chains.
    The debt coming due, along with America’s over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what’s coming next could truly be scary.
    Article (Bloomberg):
    America’s ‘Retail Apocalypse’ Is Really Just Beginning
  • Your Choice: One Mutual Fund to Hold For the Next 10-15 Years
    Maybe its me, but I am an allocation guy when it come to paring down choices.
    My H.S.A (@ Bruce Funds) will be BRUFX
    My Roth IRA (@ TRP) will be PRWCX
    My SD IRA (@Vanguard) will be VWINX or maybe even Global Wellesley, VGWIX
    My Taxable account will be VTMFX
    A 10-15 Year Trend Funds:
    Health Care - PRHCX, VGHCX, FSMEX
    Tech - PRGTX, FSITX,
    Consumerism - FSRPX
  • Reviewing Allocation Funds in a Retirement Portfolio
    One strategy that I have attempted to include as part of my portfolio review and yearly reallocation is to use "allocation funds" as the destination for other funds that need paring back. I consider these allocation funds as having attributes that served my goals well when I started investing and I now see them as serving a different goal in retirement.
    I began my investing (call this my 30's) by first owning well diversified allocation funds such as VGSTX, OAKBX, VWINX, VWELX, DODBX, PRPFX, PRWCX, and others. These funds provided me with a way to funnel small contributions into one or a few of these funds based mainly on their availability to my workplace retirement plan. It exposed "my meager, but dear savings" into what I consider a long term well managed (hopefully), well diversified investment. These funds often had a history of good risk / reward, solid management, were reasonably priced (low ER ratio) and made "staying the course" pretty certain.
    As my savings increased and my knowledge base grew (call it my 40-50's) I began realizing that I could create my own personal portfolio allocation using not only these funds, but a combination of "non-equity" funds (Bonds, RE, Commodities) and equity funds that had an "alpha/growth" strategy (sector, size, class, valuation, manager, etc.). These "fund combos" provided me with the biggest momentary losses and the largest momentary gains, but in the end have kept me up at night more often than the allocation funds I also still owned.
    I began to discipline myself to trust my fund choices to "stay the course" and use these momentary ups and downs in the market to reallocate between the "non-equity" portion and the "equity" portion of these investments, but as I reach my 60's, 70's and beyond I see myself developing a third approach.
    I see some of my low risk / low return "non-equity" funds along with some very conservation allocation funds as serving a roll in holding a portion of my portfolio for short term needs. (1-3 year, call these PONDX, PTIAX, CBUZX) for distributions of income, RMD, emergencies and retirement "fun".
    I see the higher risk / higher reward "non-equity" funds along with the higher risk / higher reward "equity" funds as serving a roll in maintaining long term growth. (10 years and longer), and I'll place my stallions here (POAGX, VGHCX, FSRPX, etc). Note to self: "I have too many of these..."
    I see my conservative, moderate & aggressive allocation funds as having a larger and key place in my retirement portfolio as the core of my holdings will occupy this space. These are investments have a (3-9 year) holding period that provide good portfolio diversification as well as "growth and income" to reallocate and "feed" ongoing (1-3 years) needs.
    The Conservative Allocation fund (3-5 year) needs in VWINX, GLRBX or CBUZX.
    The Moderate Allocation fund (5-7 year) needs in JABAX or OAKBX.
    The Aggressive Allocation fund (7-9 year) in PRWCX or BTBFX).
    Each of these allocation funds will periodically "feed" the 1-3 year funds over time.
    Each of the long term funds (10 years or more) "feed" the allocation funds.
    Hopefully there will be enough "feed" to go around.
    If you have any thought on this approach or suggestions for potential candidates for:
    1-3 year funds -
    3-5 year funds -
    5-7 year funds -
    7-9 year funds -
    10 and longer funds -
    I'd appreciate it.
  • Holiday Shopping Not A Gift For All Retail ETFs
    High on Santa's mutual fund list should be FSRPX...The fund the keeps on giving.
  • MFO Ratings Updated Through October 2016

    This month there are 12 funds that are both 20-year Great Owls (top quintile risk adjusted return for past 3, 5, 10 and 20 years) and Honor Roll funds (top quintile absolute return for past 1, 3, and 5 years).
    The 20-year GO designation is a remarkable accomplishment in itself ... long-term consistently high returns while mitigating drawdown. Add-in Honor Roll designation, which means these funds have continued to generate top returns presently.
    Here are four:
    T Rowe Price Capital Appreciation Fund (PRWCX)
    Vanguard Wellesley Income Fund; Investor Shares (VWINX)
    Fidelity Select Retailing Portfolio (FSRPX)
    Vanguard/Wellington Fund Inc; Investor Shares (VWELX)
    The remaining are munis:
    Vanguard Ohio Long-Term Tax-Exempt Fund; Investor Shares (VOHIX)
    Fidelity Michigan Municipal Income Fund (FMHTX)
    Fidelity Ohio Municipal Income Fund (FOHFX)
    Fidelity Arizona Municipal Income Fund (FSAZX)
    Vanguard Pennsylvania Long-Term Tax-Exempt Fund; Investor Shares (VPAIX)
    Fidelity Pennsylvania Municipal Income Fund (FPXTX)
    New York Long-Term Tax-Exempt Fund; Investor Shares (VNYTX)
    Nuveen Minnesota Intermediate Municipal Bond Fund; Class I Shares (FAMTX)
  • Flows Into Retailer ETFs Surge Ahead of Black Friday: The Linkster Likes
    FYI: Investors are pumping gobs of money into retail stock exchange-traded funds ahead of the holiday shopping season, wagering that improving economic growth will translate into sales at the cash register. At the opening tomorrow, I'm going to take a small position in FSRPX.
    Regards,
    Ted
    http://blogs.barrons.com/focusonfunds/2014/11/26/flows-into-retailer-etfs-surge-ahead-of-black-friday/tab/print/
    M* Snapshot Of FSRPX: http://quotes.morningstar.com/fund/fsrpx/f?t=FSRPX