The small funds in my portfolio are not performing. I would like to replace them, even though there will be a tax hit on the gains. I might do it over a couple of years instead of one big dose of gains.
My present holdings are:
Heartland Value Plus (HRVIX)
Perkins Small Cap Value (JSCVX)
Fido Small Cap (FCPVX)
I intend to add a little to FCPVX and replace HRVIX and JSCVX with VB etf.
Any input will be helpful,
Thanks
Matt.
Comments
Disclosure: I'm only 1/2 of a large cup of coffee into this morning; and normally would not write in the morning until 2 full cups have been consumed. But, I did a "walk about" outside of our house on this lovely Michigan morning and did not trip, fall or stumble. So, I will presume I have some normal mental and physical capacity to start this day.
You note FCPVX as a holding. I will presume you are aware that this fund is closed to new investors, with the exception(s) of additional monies added, as set forth via special considerations established by Fido. This fund's performance has done well, YTD.
I have not "dug" into the holdings of the funds you have listed; and only offer my viewpoint from the standpoint of "off of the top of my head" thoughts.
None of your funds, are dogs; as the sector has performed well so far this year. We all have our expections for any given sector and especially when attempting to define the value of active management of a fund. Depending upon actions of this sector for the remainer of the year; one might find the 3 funds performance to be even at the end of the year. There is no way of knowing what the managers will buy/sell going forward and which holdings will be the better winners or larger losers when December 31 arrives.
Our house holds VSCPX by virtue of an offering within a retirement acct. plan. While this fund is not at the top of the list in its category, we are not disappointed with the performance. Even to the aspect of its ER of .06%, the fund has an added 1% value when compared to the ER rates for many small cap, active managed funds.
Aside from continuing to hold FCPVX, perhaps your other small cap holding may just as well be served with an etf or index holding. As to growth, value or blend; our house holds these namings to be most fluid in many cases; as what may have been a value previous, is now more growth. M* lists FCPVX as a value fund; Fido states that it is a growth fund. One may suspect that it is both on any given day.
The below link is for M*'s "value" list. Click upon the headers (i.e., YTD) to sort the list. Also note at the YTD, the top number in the list; which is the average of the funds in the list to obtain a comparison to your funds.
Small cap value list
Lastly, your tax considerations with buys and sells may affect your actions. Fortunately, our house does not have this extra burden to consider; as our monies are in tax deferred accounts. 'Course, there are periods when our house has consideration towards the cheap and easy; as in, just buy VTI or its equivalent. VTI is U.S. concentrated, which is happy for today; has about 3,400 holdings mixed to the tune of 70% mega/large cap and the other 30% to the mid, small and micro equity area. The ER is darn near free cost; the yield is decent and the YTD is about 19.4%.
Well, anyway; enough jabber from me. Got to get back to work outside before the heat/humidity is too much; as the forecast here in Michigan is 90+ degrees for the next 7 days.
Take care of you and yours,
Catch
http://etfs.morningstar.com/quote?t=SCHA
Just a thought.
David
Global or International small cap is a good idea. GPGOX and GPIOX are closed but their new global reach fund could be an alternative. Also, the manager's former funds are still a good viable choice: WAGOX and WAIOX. Finally, Artisan Global Small Cap, ARTWX, recently started trading and you can get in as low as $1000.
If you want an high return (but also) high risk fund take a look at OBIOX. There is also OAKEX if you want a fund with longer history.
If you still want a domestic fund I've got another recommendation for a growth oriented one: BCSIX is currently open and is available on some brokerages as NTF.
Regards,
Ted
Lipper Snapshot: http://www.marketwatch.com/investing/Fund/BERWX
Berwyn is a bad idea for this investor. It is a balanced fund and not a small cap fund. If he is unhappy with the performance of HRVIX he most certainly will be unhappy with Berwyn.
I mention this because when I look through the better performing small cap funds, I see a plethora of funds that are heavily concentrated (30-50 stocks), often with relatively short lifetimes. So as consistent as they may have been over, say, three years, I'm not as comfortable with them as others are. A couple of exceptions that have long track records are Berwyn (BERWX) that Ted just mentioned, and Homestead Small Co Stock (HSCSX).
If you are considering shorter-term concentrated funds, another to throw into the mix is Brown Advisory Small Cap Fundamental Value (BIAUX).
On the other hand, if you're more interested in greater diversification, T. Rowe Price has a couple of fine funds - Small Cap Value (PRSVX) and the more growth-leaning Small Cap Stock (OTCFX). Another good diversified, moderately priced small cap fund, and one available NTF at Fidelity is Glenmede Small Cap Equity (GTCSX). If what one wants is competent and cheap without being an index fund, there's always Vanguard - Strategic Small Cap Equity (VSTCX). In other words, mostly the usual suspects.
Regarding index funds - avoid anything that tracks the Russell 2000 or a subset. It may be the only index that suffers significantly from front running (because the companies are so small and so much is indexed to it). Regarding FCPVX - since it recently added a second manager, its portfolio characteristics and performance may change over time. Given your tax situation, I might consider it a hold but not a buy for now.
Regards,
Ted
My bad.
I am thinking of BERIX ---- the Berwyn Income fund.
If you would please capitalize the fund ticker symbol so that readers here may have a quick direct linkage to further review a fund.
Thank you and regards,
Catch
Good point, nor JASCX. Those Midwesterners.