Bloomberg Article: markets-without-havens-are-becoming-all-too-real
The Bloomberg article got me thinking about doing a portfolio review.
Much of the article was focused on volatility and earlier this year I watched VMVFX deal with the pandemic's impact on this fund's focus, minimizing volatility.
I initially liked the concept of a fund (VMVFX)...a global equity fund... that attempted to minimize volatility. The Pandemic tested its strategy and proved its volatility wasn't at all minimal on the downward side of things. I sold out of that position and decided to except "normal" market volatility by purchasing PRGSX instead. The two have diverged since March with PRGSX offering the rewards of upward volatility.
I also noticed that my Moderate Asset allocation fund (PRWCX) YTD lost less and regain more than VMVFX proving that allocation funds are still a great way to manage market risk and reward.
VWINX performed as expected losing less and continues to be my portfolio benchmark (a fund that I compare all my other funds performance against). When other funds in my portfolio out perform VWINX I consider capturing that out performance by selling that fund's alpha back into VWINX. This helps me grow my portfolio's conservative base in good times and is a place where I will pull assets from during retirement minimizing the volatility of my withdrawals. I struggle going one step further by holding sizeable amounts of my portfolio in pure bond funds. I own VFSTX, PRWBX, PTIAX, THOPX, and (a Schwab bond eft) SCHZ.
Q: Is there anything magical out there in mutual/eft fund-land similar to PONDX of yesterday?
I believe even with bonds at historically low returns they still maybe the best way to minimize volatility, especially when thoughtfully combined with well managed allocation funds.
Other fund holdings that have not performed to my expectation:
FRIFX - Very correlated on the downside (to VGSIX) with little upside capture.
THOPX - A Short Term Corporate fund that has performed absolutely awful in the short (YTD) term. Showing no signs of its former performance.