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Copyright 2020 Tom Madell, PhD, Publisher
June 2020. Published May 31, 2020.
In Spite of It All, Long-Term Investing Has Proven to Be a Wise Decision
With all the pandemic, economic, geopolitical, and now societal angst being felt worldwide recently, it should be no surprise that many stock funds have taken it on the chin lately. On the other hand, most bond funds have proven to be a ballast during this period, as discussed in last month's Newsletter. This once again proves that, for many, in order to more safely avoid the risks of an all-stock portfolio, one containing both these asset classes makes a whole lot of sense. (Of course, the reverse is true as well: If bonds enter a prolonged period of poor or even negative performance, it should prove to be wise to be a holder of at least some stocks as well as bonds, as the two asset classes tend to go in somewhat different directions.)
But what is truly surprising is how well stocks have confounded our worst fears which might have suggested a more drastic collapse. In fact, for those who have been long-term holders, it might almost appear that nothing at all has been happening. In particular, had one stayed in the game over the last 10 years, the majority of holders of quality stock funds and ETFs, if they, similar to Rip Van Winkle, had just woken up from a one decade long sleep and took a glance at the performance of their portfolio, they would hardly be aware of anything out of the ordinary having happened.
As you will see in the many performance results presented in this article, Armageddon has not yet occurred for most stock investors, although that is certainly no guarantee that things may still not get worse rather than better.
A Multitude of Funds to Choose From
It has been over four months since I last updated my list of recommended funds in mid-January. Rather than try to predict which funds in the future one should own and perhaps in what proportion, as in a model portfolio, my currently recommended fund list consists of those funds I personally have had enough confidence in down through the years in to make them my biggest positions.
If you review those earlier results achieved before the coronavirus crisis hit, my stock funds were doing extremely well over the prior one year, and with the exception of two funds, mostly quite well over the prior 10 years as well.
As a result of the COVID-19 pandemic, my stock fund returns shrank quite a bit as you will see shortly in the following table. But perhaps unexpectedly, when one looks back over the prior 10-year annualized returns, they have held up quite well. My bond funds too lost a little steam over the intervening period but none approached negative territory as some of the stock funds did. No matter what funds you personally owned, I'm sure your returns were similar.
As you will see, most of my own recommended funds are from Vanguard; low costs to own the funds are a key factor. But, naturally, not everyone has access to, or even prefers Vanguard funds, especially if your investments are part of your retirement contributions at work and Vanguard funds are not part of the offerings. This absence of alternative funds has possibly been one of the biggest drawbacks to my recommendations.
To attempt to ameliorate this shortcoming and hopefully help those investors who are not able (or wanting) to invest in my own particular funds, I decided now is a good time to offer some alternative possibilities.
Doing an exhaustive search, I examined many funds from the same categories as my own recommended funds and came up with a total of 60 additional funds consisting of two mutual funds and one ETF for each of my own 20-plus recommendations. (You should note that all of my Vanguard index funds also are available as ETFs if you prefer ETFs. You can also convert most conventional Vanguard mutual funds to those ETFs without cost if you want to.)
You shouldn't expect that these additional funds are necessarily the equivalent of my funds but I suggest that they can be considered as starting points for alternate selections, if you want one of more new funds at this juncture. You can consult one or more of the many good sources of information about them available on the web.
While I feel all these alternative funds most likely have some good performance and other attributes, they have not been thoroughly vetted by me, so I can't say with assurance that they are all excellent funds with low costs. In fact, some have done worse than my own recommendations but some even better. But they mainly seem to be in the same ballpark, quality-wise, as my own specific 20 fund recommendations.
To facilitate the comparison of each of these 60 funds and ETFs with my own 20 recommended funds, you can click on the small link numbers following the Category names in my stock and bond tables below. You can then examine the returns for each of these funds with those of my funds; click on the "Back" links to return to my own recommended funds tables. Or just keep scrolling to the bottom of the page to see all 60 alternate funds.
Recommended Stock Funds
| Fund (Symbol) | Category | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Vanguard Small-Cap Index (VSMAX) | Small Blend1 | -2.56% | 4.69% | 10.44% |
| Vanguard Extended Market Idx (VEXAX) | Mid-Cap Blend2 | 2.64 | 5.76 | 11.10 |
| Vanguard Small Cap Growth Idx Adm (VSGAX) | Small Growth3 | 14.85 | 8.43 | 12.60 |
| Vanguard 500 Index (VFIAX) | Large Blend4 | 11.58 | 9.83 | 13.12 |
| Vanguard Equity Income (VEIPX) | Large Value5 | 0.13 | 6.63 | 11.60 |
| Vanguard Windsor II (VWNFX) | Large Value6 | 4.05 | 5.40 | 10.29 |
| Vanguard Energy (VGENX) | Energy7 | -28.70 | -7.52 | -1.28 |
| Vanguard Growth Idx (VIGAX) | Large Growth8 | 26.12 | 13.49 | 15.55 |
| Vanguard Pacific Index (VPADX) | Pacific Asia9 | 1.00 | 2.46 | 5.51 |
| Vanguard International Growth (VWILX) | Foreign Large Growth10 | 22.42 | 9.27 | 10.18 |
| Vanguard Europe Idx (VEUSX) | Europe11 | -3.89 | 0.36 | 5.60 |
| Vanguard Emerging Markets Idx (VEMAX) | Emerging Markets12 | -3.61 | 0.26 | 2.42 |
| Tweedy, Browne Global Value (TBGVX) | Foreign Large Value13 | -8.63 | 0.85 | 5.77 |
Recommended Bond Funds
| Fund/Symbol | Category | One Yr. Return |
5 Yr. Return |
10 Yr. Return |
| Vanguard CA Interm-Term Tax-Exempt Inv (VCAIX) | Interm Muni14 | 4.20% | 3.41% | 3.99% |
| PIMCO Total Return Instl (PTTRX) | Interm Core Plus15 | 9.17 | 4.01 | 4.29 |
| Vanguard Total Bond Market Index Adm (VBTLX) | Interm Core16 | 9.45 | 3.96 | 3.87 |
| Vanguard High-Yield Corporate Inv (VWEHX) | High Yield17 | 3.29 | 4.22 | 6.51 |
| Vanguard Short-Term Investment-Grade Inv (VFSTX) | Short Term Corp18 | 4.63 | 2.65 | 2.65 |
| PIMCO International Bond (USD-Hdg) Adm (PFRAX) | International Bond19 | 3.85 | 4.06 | 5.13 |
| Vanguard Total Intl Bd Idx Investor (VTABX) | International Bond20 | 5.26 | 4.01 | NA |
Alternate Stock Funds and ETFs
Small Blend
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| BNY Mellon Small Cap Stock Index Inv (DISSX) | -9.97 | 3.40 | 9.60 |
| Schwab Small Cap Index (SWSSX) | -4.88 | 3.78 | 9.39 |
| iShares Core S&P Small-Cap ETF (IJR) | -8.09 | 3.95 | 10.00 |
Mid Blend
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| BNY Mellon MidCap Index Inv (PESPX) | -2.44 | 4.18 | 9.93 |
| T. Rowe Price Extended Equity Market Idx (PEXMX) | 2.53 | 5.54 | 11.03 |
| iShares Core S&P Mid-Cap ETF (IJH) | -0.88 | 4.60 | 10.33 |
Small Growth
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| JPMorgan Small Cap Growth Fund (PGSGX) | 19.41 | 13.60 | 14.93 |
| BlackRock Advantage Small Cap Gr Inv A (CSGEX) | 8.44 | 6.39 | 11.14 |
| iShares Morningstar Small-Cap Growth ETF (JKK) | 11.72 | 8.74 | 12.86 |
Large Blend
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| T. Rowe Price Equity Index 500 (PREIX) | 11.40 | 9.62 | 12.88 |
| Schwab S&P 500 Index (SWPPX) | 11.58 | 9.80 | 13.07 |
| SPDR S&P 500 ETF Trust (SPY) | 12.84 | 9.77 | 13.04 |
Large Value
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Fidelity Equity-Income (FEQIX) | 1.53 | 5.21 | 9.04 |
| Franklin Equity Income A (FISEX) | 1.27 | 6.05 | 10.00 |
| iShares Morningstar Large-Cap Value ETF (JKF) | 0.46 | 5.63 | 9.64 |
Large Value
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Fidelity Equity Dividend Income (FEQTX) | -1.98 | 4.31 | 8.76 |
| PMorgan Growth And Income A (VGRIX) | 0.17 | 5.43 | 10.82 |
| Schwab U.S. Large-Cap Value ETF (SCHV) | -0.97 | 5.59 | 10.24 |
Energy
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Fidelity Select Natural Resources Port (FNARX) | -24.27 | -9.33 | -1.88 |
| Guinness Atkinson Global Energy (GAGEX) | -39.79 | -13.83 | -5.68 |
| Energy Select Sector SPDR ETF (XLE) | -28.48 | -9.60 | -0.21 |
Large Growth
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Voya Russell Large Cap Growth Idx Port I (IRLNX) | 26.68 | 15.20 | 16.24 |
| Fidelity NASDAQ Composite Index (FNCMX) | 26.81 | 14.42 | 16.57 |
| iShares Core S&P U.S. Growth ETF (IUSG) | 19.13 | 12.52 | 14.94 |
Pacific Asia
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Fidelity Pacific Basin (FPBFX) | 11.52 | 7.01 | 10.17 |
| Matthews Asia Growth Investor (MPACX) | 13.98 | 6.75 | 8.96 |
| iShares Asia 50 ETF (AIA) | 6.60 | 4.93 | 7.28 |
Foreign Large Growth
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Fidelity Advisor International Growth A (FIAGX) | 10.86 | 5.28 | 8.88 |
| Franklin Intl Growth A (FNGAX) | 20.79 | 8.24 | 8.66 |
| iShares MSCI EAFE Growth ETF (EFG) | 7.22 | 3.99 | 7.23 |
Europe
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| T. Rowe Price European Stock (PRESX) | 3.29 | 0.74 | 7.42 |
| Morgan Stanley Europe Opportunity A (EUGAX) | 18.04 | 2.94 | 6.99 |
| WisdomTree Europe Hedged Equity ETF (HEDJ) | -5.45 | 1.64 | 6.52 |
Emerging Markets
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| T. Rowe Price Emerging Markets Stock (PRMSX) | -0.96 | 3.56 | 4.21 |
| JPMorgan Emerging Markets Equity A (JFAMX) | 3.34 | 5.52 | 4.21 |
| Schwab Emerging Markets Equity ETF (SCHE) | -5.14 | 0.67 | 2.54 |
Foreign Large Value
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Dodge & Cox International Stock (DODFX) | -10.13 | -2.76 | 4.11 |
| Vanguard International Value Inv (VTRIX) | -6.75 | -0.47 | 4.30 |
| iShares International Select Div ETF (IDV) | -10.99 | -0.99 | 4.38 |
Alternate Bond Funds and ETFs
Intermediate Muni
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Schwab Tax-Free Bond (SWNTX) | 2.95 | 2.82 | 3.48 |
| Fidelity Interm Muni Inc (FLTMX) | 2.82 | 2.97 | 3.24 |
| iShares National Muni Bond ETF (MUB) | 4.50 | 3.56 | 3.73 |
Intermediate Core Plus
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Dodge & Cox Income (DODIX) -8.88 | 9.00 | 4.27 | 4.52 |
| Fidelity Advisor Total Bond A (FEPAX) | 8.39 | 3.84 | 4.18 |
| iShares Core Total USD Bond Market ETF (IUSB) | 8.76 | 3.94 | NA |
Intermediate Core
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Fidelity Total Bond Fund (FTBFX) | 8.62 | 4.13 | 4.51 |
| Metropolitan West Total Return Bd M (MWTRX) | 9.73 | 3.71 | 4.69 |
| iShares Core US Aggregate Bond ETF (AGG) | 9.37 | 3.93 | 3.82 |
High Yield
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Fidelity High Income (SPHIX) | -0.81 | 3.66 | 5.92 |
| T. Rowe Price High Yield (PRHYX) | 0.77 | 3.61 | 6.31 |
| SPDR Portfolio High Yield Bond ETF (SPHY) | 1.50 | 3.39 | NA |
Short Term Corp
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Metropolitan West Low Duration Bd M (MWLDX) | 3.09 | 1.72 | 2.63 |
| BNY Mellon Intermediate Bond M (MPIBX) | 6.04 | 2.55 | 2.48 |
| iShares Short-Term Corporate Bond ETF (IGSB) | 5.58 | 2.72 | 2.31 |
International Bond
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| Dodge & Cox Global Bond (DODLX) | 7.96 | 4.52 | NA |
| PGIM Global Total Return A (GTRAX) | 5.14 | 4.50 | 5.04 |
| iShares JP Morgan USD Em Mkts Bd ETF (EMB) | 1.31 | 3.84 | 5.30 |
International Bond
| Fund (Symbol) | One Year Return |
5 Yr. Return |
10 Yr. Return |
| AB Global Bond A (ANAGX) | 3.96 | 3.21 | 3.76 |
| JHancock Opportunistic Fixed Inc. 1 (JIGDX) | 7.47 | 4.04 | 3.91 |
| Invesco Global Short Term Hi Yld Bd ETF (PGHY) | -4.41 | 3.10 | NA |
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Need mutual fund/ETF questions answered? In this perplexing time for investors, you may be unsure of how to deal with your investments. I will try to briefly answer all questions received. Contact me at funds-newsletter@att.net
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