Was wondering what people's suggestions were for investing in global funds (and what people like) versus just holding US and International funds and occasionally rebalancing/reallocating? (I've currently got this household in the global fund OAKWX, but am watching if ARTGX closes as I like it's downside performance and want a toehold). In general though I'm interested in what people think of the category and recommend. Everyone has a small portfolio (Grad Student life...), so investing in a variety of funds outside my core sleeve is challenging.
Comments
DODWX has worked well for me, and is well ahead of VTWSX over the holding period. I view it as my core value holding and DCA into it monthly. I like the flexibility and I'm willing to give the D/C managers room to roam where they will, even Emerging Markets. AUM remains a concern for me.
Most global funds like the ones you mention seem to gravitate towards well known global names. I suspect the traditional diversification argument of holding separate domestic and international holdings holds less weight now with these types of firms. If that is the case, global funds work well. You can branch out from there into secondary type funds that explore different market niches later when you have the cash.
I have two sleeves of investments in a Roth. Broker is Fidelity. Half of the portfolio is a Psuedo-Target Date sleeve (modeled off of VFIFX) based on the idea that I'm still learning
5% DLTNX picked instead of FTBFX
13.5% FMIJX picked after reading about it here and to balance some of the risk in my other sleeve
31.5% FSTMX
the other 50% is my "hunches sleeve" which is currently operating on the idea that growth fundamentals will continue and favor small-caps and that international has more rebound in it than the US.
12.5% ARTHX picked after reading about it here and other research, after selling FBIOX over valuation concerns - this is the true play allocation everything else moves much more slowly.
12.5% OAKWX had invested in OAKMX when I started running my own portfolio on advice, moved it here when I was thinking that I wanted a stronger international tilt, but wasn't sure how much
10% WAIGX picked for international small/mid-cap (considered OBIOX as well)
10% GTCSX picked for domestic small-cap
5% MOAT as something that would hopefully do better than VIG under rising rates with similar risk
Sister has a lower risk tolerance and futzes less, but following my advice ended up with:
24% VFIFX
16.5% MOAT
13.5% OAKIX
11.5% OAKMX
13.5% BIAUX
13% WAIGX
8% PARWX because she was interested in a fund with social conscience.
Neither of the portfolios is much more than 20 grand, so I worry that there is just too much going on and might be better off consolidated as I continue learning.
Regards,
Ted
http://quotes.morningstar.com/fund/f?t=ARSPX®ion=usa&culture=en-US
Ok Ted, you might have just added one more to my fund collection ... #52 if I proceed with purchase. Thanks for the tip.
Old_Skeet
Regards,
Ted
Regards,
Ted
Regards,
Ted
My other thought, just eyeballing this, is that you have a lot of overlapping funds doing the exact same thing. MOAT, OAKMX and PARWX, for instance are all similar funds, as are ARTHX and OAKWX. With $20k, everything in the port should have a specific purpose. For instance, if social issues and volatility are important to your sister, maybe consider PRBLX as a core holding for domestic LC. Since you seem dubious about ARTHX, either move that money into OAKWX or merge both into ARTGX/OAKGX/TWEBX depending on your capacity for handling risk. Once you've decided how much to allocate to two or three core funds, you've limited your available assets enough to clarify your thinking on what you can buy/need as a supporting fund. I do think global funds work well for a small core because you're giving a manager flexibility to diversify for you, while keeping you from having to juggle too many funds.
With the total assets involved, I would consider one of three things: either use ETFs to pursue an MPT style diversified growth allocation plan; consolidate your fund holdings into two or three core style funds until you can begin to add in diversified areas; or use a target date fund until you're comfortable enough making your own decisions.
Good luck.
Expenses don't necessarily need to be that much higher. DODWX/DODFX and TWEBX/TBGVX each have one bp difference, and GPROX is cheaper than GPIOX. OAKGX and OAKWX will add 15-20 bps. ARTGX is a different story.
GAINX is a relatively new fund, low expenses and attacking investments from the dividend growth angle.
DODWX is a low expense large cap value fund from a very experienced company. For my tastes they're too willing to move into big banks, but you may differ on that.
JPPIX is a low expense all cap value fund of a conservative nature. It comes in various fund classes depending on how much you have to invest.
PGVFX is another low expense all cap value fund which owns quite a bit of smallcap. They just lowered their expenses to 0.99%. I think it's a nice way to get international small value at a very reasonable price.
GPROX is a new global small cap fund. There aren't too many of these around and this looks like a good one.
FPRAX just became a global fund. Absolute value, meaning they're willing to go into cash if they can't find anything they like. From a fine fund company, it's certainly one to keep an eye on.
There are some good choices out there. I own several of these myself.
There are global funds that simply invest globally in some market cap based or some other formula and do no tactical allocations. These are useful when you want global coverage with the fewest funds possible in your portfolio.
There are global funds with an allocation strategy to exploit current trends. These are the funds you outsource your allocation strategy to. In practice, very large funds seldom do much tactical allocation that makes a difference because of size. I am not sure the ER of these big funds are worth it.
There are global funds with risk management strategies that only invest when opportunities open up. Not otherwise. These can be good funds to get exposure when you want low volatility. But you can also do that with separate funds with similar approach in each.
Other than the first specific needs above to reduce number of funds, I don't see much of a need for using global funds. Unless your strategy is collecting one of whatever is shining at the moment.
The avg 401k account in 2005 still had single-digit allocation to international.
So you can't compare that to Global funds which are much more diversified that the avg investor the past 15 years. That's the key devils in the detail information as to why it's hard to generalize by saying that yeah you can replace a Global fund with your own US+International holding. What Global Fund managers and what most investors were doing the past 10-15 years were 2 different things.
SGENX as an example has done great investing globally. In looking back in that 2000-2005 time period, one of the reasons it was able to shine was because the US market got way way too expensive and Jean-Marie Eveillard sought out cheaper stocks elsewhere around the world...and so it actually went to a very low allocation to US stocks. And whoever said that Global funds are mostly allocated to US stocks is mis-informed.
The investors who owned US+International, had a tiny sliver or up to 5% or possibly 10% in international allocation between 1999-2005 and is not comparable to what Global Fund managers were doing. I remember debates back then in a number of forums whereby some investors questioned the need for any international exposure.
Global funds such as SGENX back then went to a low allocation of US stocks because from a bottoms-up stock picking perspective where there were much better values outside the US.
So I have really liked using Global funds including Global Allocation funds - and I use them as strong core holdings but not exclusively.