Next WylieMoney Pick: Harbor International HIINX

The next fund I will add to the "WylieMoney Slowly" portfolio is a Foreign Large Cap Value fund. I have hypothetically invested $2500 in one fund per month since I started this experiment last May.

Click on the image below for a larger view.

• Mid Cap Blend NTIAX Columbia Mid Cap Ind My Post I 1
  
• Global Equity JSVAX Janus Contrarian My Post M 2
  
• Bond Gov. Long BTTRX American Century Tar My Post M 3
• Large Cap Growth JAGIX Janus Growth & Incom My Post M 4
• Small Cap Value BRSVX Bridgeway Small-Cap My Post Q 5
• Foreign Large Growth JAOSX Janus Overseas My Post M 6
• Mid Cap Growth BPTRX Baron Partners My Post M 7
  
• Large Cap Blend SLASX Select American Shares S My Post M 8
• Specialty Real Estate - SSREX SSgA T. Act. REIT My Post M 09
• Large Cap Value - AAGPX A. Beacon Lg Cap Val My Post M 10
• Small Cap Growth - BGRFX Baron Growth My Post M 11

The 12th category I picked for the original WylieMoney Portfolio was Foreign Large Value so it is the 12th fund I will add 'slowly.' And as I do each month, I look to Etrade to see if a better option than I originally picked, HIINX Harbor Intl My Post, is available.

I'll save you some suspense. HIINX is still the best.

Lowest Turnover Ratio by a lot meaning likely lower Capital Gains distributions, which is key to keeping taxes low in a taxable account.


Tied with two additional options for the highest star rating- 4 in this case. Not the lowest Expense Ratio, but not the highest. Longest Manager Tenure meaning that performance was achieved with the folks currently in charge.

And what a performance it has been. Only one other fund has come close to its three year performance and that fund has higher expenses and almost three times the turnover.


So on the first day in April that markets tank, I'll add HIINX, Harbor International to the WylieMoney Slowly portfolio.

Portfolio Update 3/28/08: ETFs on the Rise

As we approach May and close in on the first year since this experiment began the three index portflios have converged with losses of -5.91% to -5.41%. Investing in the S&P 500 alone would have resulted in a loss of -10.73%. Investing in the mostly managed options I researched would have resulted in a loss of -3.04%

The ETF 20 portfolio, the truest index version of the WylieMoney 20, had a rough start in 2007 but has been the best performer in 2008 and had an excellent week last week.

WylieMoney 20 Mostly Managed

WylieMoney Slowly

Lazy 20 Mostly Index

Three Fund Index

ETF 20

S&P 500

Portfolio Update 3/21/08: Hope Springs Eternal

Even though it is still chilly up here in New England, Spring has arrived. Bulbs are busting forth on the sunny side of our house.


Even on the shady side, if you look close enough, you can find growth.


This past week was crazy- huge swings up and down. Since I only update on Fridays, my chart is not an indicator of daily volatility.

The S&P 500 did better than the diversified portfolios.

I removed the 1 week Column from the image below because Morningstar is including the last 5 trading days, not Monday through Friday, as US markets were closed in te 21st.

The WylieMoney slowly portfolio made a dramatic leap into second place. This is due, in no small part, to its current overweight in Real Estate. Over the last 5 trading days, the fund SSREX SSgA T. Act. REIT My Post was up 6.73%- more than any other fund in this experiment.

The ETF 20 portfolio has outperformed year to date, but was the worst performer on Thursday.

WylieMoney 20 Mostly Managed

WylieMoney Slowly

Lazy 20 Mostly Index

Three Fund Index

ETF 20

S&P 500

Portfolio Update 3/14/08: Long Term US Bonds Rule

Ahhh sweet government bonds. Since last May, the single best performing fund of any of the funds in the portfolios I track is BTTRX American Century Target Mat 2025 My Post.

While the portfolios have all lost value:

BTTRX has returned 16.99%. And in the WylieMoney Slowly Portfolio I added BTTRX on 7/6/07 and it has since returned 24.30%. In my post entitled "Is now the time to buy government long bonds?" I answered 'probably not.' Well, I was wrong. But since I invest (hypothetically) using a system, I invested anyway.

My system for the WylieMoney portfolios continues to show promise as both WylieMoney portfolos and "My Brokerage" in which I have taken some of my own advice, are the three best performing portfolios of the bunch.

I'm not sure what it says that investors look at the long term prospects of the US as we do nothing about Medicare, Social Security and our debt and continue to use tax dollars to bail out crooks and the greedy in a cycle of inadequate regulation followed by apology checks from the government and hastily passed regulation padding the retirement accounts of FOWs (Friends of Washington) and think YES- this is a greeeaaaat investment...

Maybe everybody uses a system instead of thinking about whether or not the investment is great.

WylieMoney 20 Mostly Managed

WylieMoney Slowly

Lazy 20 Mostly Index

Three Fund Index

ETF 20

S&P 500

Portfolio Update 3/7/08: Down

The three mostly index portfolios continue to track each other closely since they converged early this year.


Last week was another rough one for all the portfolios, but diversity continues to pay off.

WylieMoney 20 Mostly Managed


WylieMoney Slowly

Lazy 20 Mostly Index

Three Fund Index

ETF 20

S&P 500

Today is the Day I'm Adding a Small Cap Growth Fund

Today is the day I'm adding BGRFX Baron Growth Small Cap Growth Fund to the WylieMoney Slowly Portfolio.

Summary Mutual Fund Prospectus

Laura Pavlenko Lutton over at Morningstar has forwarded a suggested summary mutual fund prospectus format to the SEC.

Anyone who has looked through a couple of mutual fund prospectuses from different fund companies knows that finding out what a fund is really all about from the prospectus is not an easy task.

I found her letter and example form a solid proposal. I also found her example humorous.

She praises Putnam's description of Putnam Voyager PVOYX as being "very clear and easy to read. They say: 'We invest mainly in common stocks of U.S. companies, with a focus on growth stocks. Growth stocks are issued by companies that we believe are fast-growing and whose earnings we believe are likely to increase over time.'"

She's right- Putnam is very clear about what they do not to mention how they do it. Here is their investment philosophy:


Putnam has been consistent and is very clear about their style. The problem is that Putnam has been consistently terrible. It has "Earned" the lowest possible star rating from Morningstar (One).

With the exception of 2002, this fund has trailed its peers and has consistently bounced around the bottom half of similar funds for a long, long time:


I'll write more about my personal history with this and other Putnam funds soon. In the meantime, hopefully the SEC will adopt a standard for a summary form prospectus making it easier for investors to learn what a fund is really all about. Of course, until then we can simply use Morningstar and other web sites to get this information.

Here is page one of Morningstar's short form proposal (Click image for larger version):

Next WylieMoney Slowly Category: Small Growth

The first down day in March (Damn you leap year! That should have been Friday!), I'll put $2500 hypothetical dollars in a Small Growth fund in the WylieMoney Slowly portfolio.

My original pick for the WylieMoney Portfolio was BGRFX Baron Growth fund My Post. So is this still the best no-load, no-fee option with a $2500 or lower initial and $100 subsequent investment minimums and lower than its peers turnover and expenses?

At first glance, maybe not:


Baron Growth has the best performance over the longest time frame but over the last three years and even five years there are a number of funds that have performed slightly better. But Baron Growth is the only fund with 5 stars:

The Forward Hoover Small Cap Equity fund FFSCX requires $4000 initialy, so I rule it out. TCW Small Cap Growth TGSNX has high expenses and a short track record. Since there are several options with lower expenses, I rule it out.

So I pick 5 of the remaining top performers and lok at some of the details. The best performing over 3 years, Neuberger Berman Small Growth NBMOX has really high turnover in addition to the highest fees of the bunch (see above). Marshall Small Cap Growth MRSCX also has high turnover so either of these would be less than ideal for a taxable account.


Value Line Emerging Opportunities VLEOX has low turnover, small total assets which is good for a small cap fund and has a smaller percentage of total assets in its top ten investments. When looking at recent performance however, Baron Growth looks like the safer bet. Over the last 1 month and 3 month periods, Baron Growth has survived recent sell offs better than the competition.


And that is why Morningstar gives it 5 stars instead of the 4 stars given to Value Line Emerging Opportunities. Baron Growth has earned slightly less than the other funds but has done so with substantially less risk.

Either fund would be a decent choice, but I will stick with the Baron Growth fund.

Portfolio Update 2/29/08: WylieMoney 20 has a Good Friday

Friday was not pretty for US markets.


On Thursday, the WylieMoney 20 Mostly Managed Portfolio had actually posted a profit since Last May 1st, but Friday wiped that out. On Friday the WylieMoney 20 had the best one day performance (compare -1.65% with the US indexes above!), one week performance, year to date performance, and return since purchase last May 1st of all the portfolios I track.


The difference between the WylieMoney 20 Mostly Managed portfolio of funds I picked and the portfolios of Indexes for each of the 20 categories I used is now in the thousands. What is interesting is that the Lazy 20 Mostly Index Vanguard portfolio, the ETF 20 and the Three Fund Index portfolio are all posting nearly the same return since purchase.

The Three Fund Index was doing well and the ETF 20 portfolio really struggled for a while but their fortunes have reversed.

WylieMoney 20 Mostly Managed WylieMoney Slowly Lazy 20 Mostly Index Three Fund Portfolio ETF 20 S&P 500