Wylie Money

In November of 2006, I started researching Mutual funds for a hypothetical Portfolio. I was frustrated by article after article praising this fund or that, listing the 'best' funds available, only to find they were not available through my brokerage, they were closed to new investors, they required $10,000 or more up front to purchase, etc. So I established the following criteria for my experiment. Each fund had to:

Be available through Etrade
Be open to new investors
Be a No-Load, No-Transaction Fee fund
Have an initial minimum investment amount of $2500 or less
Have subsequent minimum investment amount of $100 or less

When picking each fund I looked at a variety of factors. I wanted a portfolio that could work for a non-retirement account so tax efficiency was important. Rarely was there one fund in each category that was the best in every aspect so the selection was sometimes more art than science. Here are the factors I considered:

Turnover Ratio
Expenses
Performance
Style Drift

Then on May 1st of 2007, I 'hypothetically' invested $50,000 in the 20 funds I selected. I set up a portfolio at Morningstar with $2500 'invested' in each fund. Then I set up $50,000 in a portfolio of Vanguard funds to see which would perform better.

The funds I picked are mostly managed funds meaning managers pick and choose which companies they think will do well and invest in them. Most of the Vanguard funds are index funds, meaning the 'supervisor' of the fund invests in every company in the index the fund seeks to track.

I also invested in 20 ETFs which can be loosely described as index funds that trade like stocks. Later, I set up another portfolio of three index funds and invested 55% in US stocks, 15% in bonds and 30% in International stocks. This was close to the percentage breakdown of the 20 fund portfolios and I wanted to see if just picking three broad index funds was just as effective as attempting to keep track of 20 different funds. I 'invested' $50,000 in SPY an index fund that tracks the S&P 500 index. And finally, I set up a portfolio that will add one new fund each month until it has 20.

Below are the details about each fund. I am listing the category the fund covered when I picked it, the ticker symbol with a link to Morningstar's details about each fund, the name of the fund, my post explaining why I picked it, an indication of whether it is a managed fund 'M' or an Index fund 'I' and the order in which I picked the fund.

The WylieMoney 20 Mostly Managed Portfolio

Large Cap Growth - JAGIX Janus Grth & Income My Post M 04
Large Cap Blend - BIGRX Amer. Ctry Inc & Grth My Post M 08
Large Cap Value - AAGPX A. Beacon Lg Cap Val My Post M 10
Mid Cap Growth - JAENX Janus Enterprise My Post M 07
Mid Cap Blend - NTIAX Columbia Mid Cap Indx My Post I 01
Mid Cap Value - MRVEX Marshall Mid-Cap Value My Post M 15
Small Cap Growth - BGRFX Baron Growth My Post M 11
Small Cap Blend - DISSX Dreyfus Sl Cap Stk Indx My Post I 18
Small Cap Value - STSCX Stratton Small-Cap Val My Post M 05
Global Equity - MDISX Mutual Discovery Z My Post M 02
Foreign Large Growth - JAOSX Janus Overseas My Post M 14
Foreign Large Blend - MDIIX BlackRock Intl Index My Post I 19
Foreign Large Value - HIINX Harbor Intl My Post M 12
Foreign Small Growth - ACFFX Col. Acorn Intl Sel My Post M 06
Foreign Emerging - SSEMX SSgA Emerging Mkt My Post M 16
Specialty Real Estate - SSREX SSgA T. Act. REIT My Post M 09
Bond Gov. Long - BTTRX A. Ctry Target Mat 2025 My Post M 03
Bond Inter. Term - MGFIX Managers Bond My Post M 17
Bond Short Term - APSTX Amer. Perf S/T Inc N/L My Post M 13
Bond Inflation Prot - ACITX American Century Inf My Post M 20

The Lazy 20 Mostly Index Portfolio

Large Cap Growth - VIGRX Vanguard Growth Index I
Large Cap Blend - VLACX Vanguard Large Cap Index I
Large Cap Value - VIVAX Vanguard Value Index I
Mid Cap Growth - VMGIX Vanguard Mid-Cap Growth I
Mid Cap Blend - VIMSX Vanguard Mid-Cap Index I
Mid Cap Value - VMVIX Vanguard Mid-Cap Value I
Small Cap Growth - VISGX Vanguard Small Cap Growth I
Small Cap Blend - NAESX Vanguard Small Cap Index I
Small Cap Value - VISVX Vanguard Small Cap Value I
Global Equity - VHGEX Vanguard Global Equites M
Foreign Large Growth - VWIGX Vanguard International Grth M
Foreign Large Blend - VGTSX Vanguard Total Intl Stock Index I
Foreign Large Value - VTRIX Vanguard International Value M
Foreign Small Growth - VINEX Vanguard Intl Explorer M
Foreign Emerging - VEIEX Vanguard Emerging Mk Index I
Specialty Real Estate - VGSIX Vanguard REIT Index I
Bond Gov. Long - VUSTX Vanguard Long-Term U.S. Treasury M
Bond Inter. Term - VFICX Vanguard Interm-Term M
Bond Short Term - VBISX Vanguard Short-Term Bond Index I
Bond Inflation Prot - VIPSX Vanguard Inflation-Prot Secs M

ETF 20

Large Cap Growth - VUG Vanguard Growth ETF I
Large Cap Blend - VV Vanguard Large Cap I
Large Cap Value - VTV Vanguard Value ETF I
Mid Cap Growth - VOT Vanguard Mid-Cap Grth I
Mid Cap Blend - VO Vanguard Mid Cap ETF I
Mid Cap Value - VOE Vanguard Mid-Cap Value I
Small Cap Growth - VBK Vanguard Small Cap Grth I
Small Cap Blend - VB Vanguard Small Cap I
Small Cap Value - VBR Vanguard Small Cap Value I
Global Equity - IOO iShares S&P Global I
Foreign Large Growth - EFG iShares MSCI EAFE Grth I
Foreign Large Blend - EFA iShares MSCI EAFE Intl I
Foreign Large Value - EFV iShares MSCI EAFE Value I
Foreign Small Growth - DLS WisdomTree Intl I
Foreign Emerging - VWO Vanguard Emerging Markets I
Specialty Real Estate - VNQ Vanguard REIT Index I
Bond Gov. Long - TLT iShares Lehman 20+ Years I
Bond Inter. Term - BIV Vanguard Intermediate I
Bond Short Term - BSV Vanguard Short-Term I
Bond Inflation Prot - TIP iShares Lehman TIPS I

Really Lazy 3 Fund Portfolio

VTSMX Vanguard Total Stock 55%
VBMFX Vanguard Total Bond 15%
VGTSX Vanguard Total Intl 30%

S&P 500

SPY S&P 500 Index ETF

The WylieMoney Slowly Mostly Managed Portfolio

Mid Cap Blend - NTIAX Columbia Mid Cap Indx My Post I 01
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
Foreign Large Value - HIINX Harbor Intl My Post M 12
Bond Short Term - APSTX Amer. Perf S/T Inc N/L My Post M 13
Foreign Large Growth -MIOFX Marsico Intl. Opportunities My Post M 14
Mid Cap Value - JMCVX Janus Mid Cap Value My Post M 15
Foreign Emerging - SSEMX SSgA Emerging Mkt My Post M 16
Bond Inter. Term - MGFIX Managers Bond My Post M 17
Small Cap Blend - RYVFX Royce Value Svc My Post M 18
Foreign Large Blend - MDIIX BlackRock Intl Index My Post I 19
Bond Inflation Protected - ACITX American Century Inf My Post M 20

Portfolio Updates
11/06/09- Sorry I Am
10/09/09- Busy Child
09/25/09- Burning Down the House
09/18/09- Who Knew
09/11/09- Peach
08/14/09- Never Going Back Again
08/07/09- The Boys of Summer
07/31/09- All is Full of Love
07/24/09- Seven Days
07/17/09- Days Go By
07/10/09- Remember the Time?
05/15/09- It Ain't Over 'Til It's Over
05/08/09- Airbag
05/01/09- Two Years In
04/24/09- Don't Stop Believing
04/17/09- Invisible Sun
03/27/09- Loser
03/13/09- Hallelujah
02/27/09- Here Comes the Flood
02/20/09- &$@#*!&#*
02/13/09- Main Theme
02/06/09- That's Good
01/30/09- Lard
01/23/09- Southbound Pachyderm
01/16/09- I Won't Back Down
01/09/09- When You're Falling
01/02/09- Alright
12/26/08- We are the Champions
12/19/08- Wanderlust
12/12/08- Is This It
12/05/08- Alfie
11/28/08- Curtains
11/21/08- Help!
11/14/08- Nasty
11/07/08- Bob the Drummer
10/31/08- Big Time
10/24/08- History Repeats Itself
10/17/08- Should I Stay or Should I Go
10/10/08- It's The End Of The World As We Know It (And I Feel Fine)
10/03/08- The Show Must Go On
09/26/08- Down in the Hole
09/19/08- Think About it
09/12/08- Um, Is this Blog Dead?
09/05/08- Anybody There?
08/29/08- Where's Wylie?
08/22/08- No Post
08/15/08- Roll On
08/08/08- Shaft
08/01/08- Changes
07/25/08- Heavy Cloud No Rain
07/18/08- Something 2 Dance 2
07/11/08- Behind My Camel
07/04/08- Calling It Quits
06/27/08- Swan Dive
06/20/08- Escape From New York
06/13/08- Dancing With Myself
06/06/08- Bad
05/30/08- Comin Back
05/23/08- Driven to Tears
05/16/08- I'm On Fire
05/09/08- The Song Remains the Same
05/02/08- Road to Nowhere
04/25/08- Jump Around
04/18/08- Lovely Day
04/11/08- Contrarian
04/04/08- Up
03/28/08- ETFs on the Rise
03/21/08- Hope Springs Eternal
03/14/08- Long Term US Bonds Rule
03/07/08- Down
02/29/08- WylieMoney has a Good Friday
02/22/08- Another Positive Week But Still in the Red
02/15/08- Will ETFs Come Back
02/08/08- The Portfolio Shuffle
02/01/08- Back in Black!
01/26/08- Markets and My Appendix Blow Up
01/18/08- No update (I was hurting more than normal)
01/11/08- Everybody Hurts... Sometimes
01/04/08- Ouch!
12/28/07- WylieMoney Inches Ahead Down the Stretch
12/21/07- 0% is Better than a Loss
12/14/07- Capital Gains Bring Sadness
12/07/07- Gains All Around
11/30/07- Back in Black
11/23/07- Emerging Markets and Domestic Bonds
11/16/07- S&P takes Baby Step Forward
11/12/07- ETFs in the Red
11/02/07- My Roth IRA Takes a Tumble
10/26/07- S&P 500 is Crushed
10/19/07- Capital Gains and Painful Losses
10/12/07- My Accounts Join the Race
10/05/07- WylieMoney Up 7.51% Since May
09/28/07- WylieMoney Pulls Away
09/21/07- WylieMoney on Top!
09/14/07- WylieMoney ahead, ETFs remain in red
09/07/07- Being Lazy hurts
08/31/07- WylieMoney breaks tie
08/24/07- WylieMoney and Three Fund tie
08/17/07- S&P500 in First
08/10/07- WylieMoney the best loser
08/02/07-WylieMoney one of the few in the green
07/26/07- Lazy Portfolio Plummets
07/23/07- Three Fund Portfolio on top
07/12/07- Three Fund Index takes lead
07/02/07- Managed Funds outperform
06/06/07- WylieMoney hangs on
05/30/07- WylieMoney ahead, but not by much
05/08/07- WylieMoney jumps into lead

It is time to confirm the fund I will add to the WylieMoney slowly portfolio on the first down day in September. When I researched the best no-load, no-fee mutual funds in 20 different categories available through Etrade with low initial and additional investment minimums last winter, STSCX Stratton Small Cap Value Fund looked like the best Small Cap Value fund at the time.

Is this still the case?

The answer is no and the reason is frustrating. The Stratton Small Cap Value Fund is no longer a Small Cap Value fund. It has moved into the Blend category. I will be adding a Small Cap Blend fund later, so I have to look around for a value fund.

When I search for no-load, no fee Small Cap Value funds available through Etrade, the choice is clear. But there are complications.

The choice is Bridgeway Small-Cap Value N BRSVX. It is the only 5 star offering. It has trounced the other funds available over the last three years almost 2 to 1 earning 22.13% annually compared to 11.18%-15.10%. It has a low 49% turnover ratio (low for small cap value funds). It has very low for its category expense ratio of 0.77%.

So what are the complications, you might ask?

Well, I actually own this fund and I can tell you that Etrade has the additional minimum contributions for this fund wrong. The minimum through an AIP is $100. I actually contacted Bridgeway and they confirmed the information on Morningstar's site:

$100 is the maximum AIP contribution limit I set for my hypothetical portfolios, but Etrade has this set up with a $500 maximum in their web interface:

Read here about my adventures getting Etrade to fix this for other funds I own. I actually got Etrade to set up a low AIP program for me for this fund, so I am able to make regular contributions into this fund in increments as small as $100 despite the fact that their online interface shows a minimum investment amount of $500.

So I am picking this fund for the WylieMoney Slowly hypothetical portfolio, despite the hypothetical rage I will feel having to contact Etrade to get them to fix yet another instance of the same issue with their interface that I have reported to them several times already.

In this case, the Bridgeway fund is so much better than its peers, it is worth the hassle... 'hypothetically.'

So on the first day in September that Small Cap Value funds take a beating, I will add BRSVX to the WylieMoney Slowly portfolio.