The Conservative portfolio rose .29% in April, reflecting a strong bond market. Our equity funds were down for the month, but strength in larger allocations to bond funds overshadowed the losses.
Harbor bond was up 1.45% which means manager Bill Gross is not running a very large short term bond allocation and likely has mostly intermediate term bonds as well as some exposure to foreign bonds.
Shorter term bonds did fine, with Vanguard Short Term Corporate up .67%. Junk bonds were down in April – our Vanguard High Yield Corporate was down .55% for the month – so Gross is probably light on higher risk corporates as well.
If junk bonds continue their recent underperforming of investment grade bonds we may increase our junk bond stake back to 10%. This move would require a big move down for junk (or a big move up for regular bonds with junk staying flat).
Foreign bonds were strong, but mostly as a result of interest rates falling globally. American Century International Bond was up 1% in April. The U.S. dollar has stabilized and in fact has been strengthening of late – another surprise to many investors who expected our dollar to keep falling amidst continuing trade deficits. Maybe a relatively strong economy trumps trade deficits, for now at least. Like junk, this is a category we would increase to our old levels if the dollar staged a very strong comeback, say 15% or more from current levels. For now, we’re cutting it back to just 5% as of the end of April.
Vanguard Dividend Growth was down .67%.
We like healthcare now enough to bring it into our lower risk portfolios like this one. We now have a 5% stake to Heath Care Select SPDR (XLV) an ETF (exchange traded fund). We think this sector has more appeal than Utilities (which have had a great run recently) so we cut back on American Century Utility Income. This utility fund was up almost 1% last month (bucking the general trend downward in stocks) and is up over 68% since we added it to the portfolio at the end of February 2003– far outpacing the S&P500 over the same time period.
In keeping with our easing-up-on-small-cap theme of recent months, we dumped Forward International Small Companies and added SSgA International Growth Opportunities. Forward was down 2.44% last month, but we are up 69% since we added it to the portfolio. We don’t’ expect a similar move in the new fund, but we’re trying to remove the risk foreign small cap stocks may give back some of their gains soon.
The Aggressive Growth portfolio fell 1.82% in April – our worst performing portfolio. Strong bonds didn’t make up for weak stocks.
What really held this portfolio back was smaller cap value stocks, exactly the area we are trying to ease up on across our portfolios. FMI Common Stock was down a sharp 4.22%, which was less than a small cap index, but nothing to brag about.
Shorter term bonds did fine, with Vanguard Short Term Corporate up .67%. Junk bonds were down in April – our Vanguard High Yield Corporate was dropped .55% for the month. Payden Global Short Bond did about as well, up .48%. We’ve added a new 5% position in Harbor Bond, a fund in several of our other portfolios.
The U.S. dollar has stabilized and in fact has been strengthening of late – another surprise to many investors who expected our dollar to keep falling amidst continuing trade deficits. Maybe a relatively strong economy trumps trade deficits, at least for the time being. Like junk bonds, foreign bonds are a category we would increase if the dollar staged a very strong comeback, say 15% or more from current levels.
We like healthcare now and added a 10% stake to Heath Care Select SPDR (XLV) an ETF (exchange traded fund). We think this sector has more appeal than Telecom so we cut the expensive Gabelli Global Telecom fund from the portfolio at the end of April.
In keeping with our easing-up-on-small-cap theme of recent months, we lowered our allocation to Artisan International Small Cap (and therefore the alternate for those who couldn’t get in to the now closed fund - Forward International Small Companies) from 10% to 5%. The fund was down 1.82% last month (Forward down 2.44%), but we are up 96% since we added it to the portfolio in April 2002. We’re trying to remove the risk that foreign small cap stocks may give back some of their gains soon.
We’re not as excited about foreign stocks as we have been in recent years. Our lack of enthusiasm is based primarily on fund investors in general plowing money into the category. We cut back on T. Rowe Price Japan (PRJPX) to 5% from 10% of the portfolio. The fund was down 1.3% last month - not bad for a country facing renewed economic concerns. We also cut back on SSgA Emerging Markets, now 5% from 10%. The fund was down 2.27% last month.
An increased stake in Bridgeway Blue Chip 35 moves us more into giant-cap U.S. stocks, an area we think will do well going forward.
We like Technology going forward for higher risk investors, and just added a 5% stake to another ETF, Technology SPDR (XLK).
April 2005 performance review
The Conservative portfolio rose .29% in April, reflecting a strong bond market. Our equity funds were down for the month, but strength in larger allocations to bond funds overshadowed the losses.
Harbor bond was up 1.45% which means manager Bill Gross is not running a very large short term bond allocation and likely has mostly intermediate term bonds as well as some exposure to foreign bonds.
Shorter term bonds did fine, with Vanguard Short Term Corporate up .67%. Junk bonds were down in April – our Vanguard High Yield Corporate was down .55% for the month – so Gross is probably light on higher risk corporates as well.
If junk bonds continue their recent underperforming of investment grade bonds we may increase our junk bond stake back to 10%. This move would require a big move down for junk (or a big move up for regular bonds with junk staying flat).
Foreign bonds were strong, but mostly as a result of interest rates falling globally. American Century International Bond was up 1% in April. The U.S. dollar has stabilized and in fact has been strengthening of late – another surprise to many investors who expected our dollar to keep falling amidst continuing trade deficits. Maybe a relatively strong economy trumps trade deficits, for now at least. Like junk, this is a category we would increase to our old levels if the dollar staged a very strong comeback, say 15% or more from current levels. For now, we’re cutting it back to just 5% as of the end of April.
Vanguard Dividend Growth was down .67%.
We like healthcare now enough to bring it into our lower risk portfolios like this one. We now have a 5% stake to Heath Care Select SPDR (XLV) an ETF (exchange traded fund). We think this sector has more appeal than Utilities (which have had a great run recently) so we cut back on American Century Utility Income. This utility fund was up almost 1% last month (bucking the general trend downward in stocks) and is up over 68% since we added it to the portfolio at the end of February 2003– far outpacing the S&P500 over the same time period.
In keeping with our easing-up-on-small-cap theme of recent months, we dumped Forward International Small Companies and added SSgA International Growth Opportunities. Forward was down 2.44% last month, but we are up 69% since we added it to the portfolio. We don’t’ expect a similar move in the new fund, but we’re trying to remove the risk foreign small cap stocks may give back some of their gains soon.
The Aggressive Growth portfolio fell 1.82% in April – our worst performing portfolio. Strong bonds didn’t make up for weak stocks.
What really held this portfolio back was smaller cap value stocks, exactly the area we are trying to ease up on across our portfolios. FMI Common Stock was down a sharp 4.22%, which was less than a small cap index, but nothing to brag about.
Shorter term bonds did fine, with Vanguard Short Term Corporate up .67%. Junk bonds were down in April – our Vanguard High Yield Corporate was dropped .55% for the month. Payden Global Short Bond did about as well, up .48%. We’ve added a new 5% position in Harbor Bond, a fund in several of our other portfolios.
The U.S. dollar has stabilized and in fact has been strengthening of late – another surprise to many investors who expected our dollar to keep falling amidst continuing trade deficits. Maybe a relatively strong economy trumps trade deficits, at least for the time being. Like junk bonds, foreign bonds are a category we would increase if the dollar staged a very strong comeback, say 15% or more from current levels.
We like healthcare now and added a 10% stake to Heath Care Select SPDR (XLV) an ETF (exchange traded fund). We think this sector has more appeal than Telecom so we cut the expensive Gabelli Global Telecom fund from the portfolio at the end of April.
In keeping with our easing-up-on-small-cap theme of recent months, we lowered our allocation to Artisan International Small Cap (and therefore the alternate for those who couldn’t get in to the now closed fund - Forward International Small Companies) from 10% to 5%. The fund was down 1.82% last month (Forward down 2.44%), but we are up 96% since we added it to the portfolio in April 2002. We’re trying to remove the risk that foreign small cap stocks may give back some of their gains soon.
We’re not as excited about foreign stocks as we have been in recent years. Our lack of enthusiasm is based primarily on fund investors in general plowing money into the category. We cut back on T. Rowe Price Japan (PRJPX) to 5% from 10% of the portfolio. The fund was down 1.3% last month - not bad for a country facing renewed economic concerns. We also cut back on SSgA Emerging Markets, now 5% from 10%. The fund was down 2.27% last month.
An increased stake in Bridgeway Blue Chip 35 moves us more into giant-cap U.S. stocks, an area we think will do well going forward.
We like Technology going forward for higher risk investors, and just added a 5% stake to another ETF, Technology SPDR (XLK).