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I have too many large blend funds and I would like to eliminate one. I currently hold YAFFX, BBTEX, SMVLX in my SEP-IRA. I have SEQUX for my LG and FAIRX for my LV. YAFFX and BBTEX are closed to new investors. I would appreciate everyone's thoughts. Thanks!
I've talked about Fairholme in other threads (Berkowitz is highly skilled, but I couldn't disagree more on Sears.) That said, I would have to choose BBTEX if I had to get rid of one.
May I ask, what was your original reasoning for buying these funds? Perhaps, by knowing why you bought them, one may be able to suggest which one to sell (with a better point of reference).
Yes, I bought them before the closed and noticed that the performance has tailed off. I bought SMVLX and I have it for the last two years with much better results.
Forgive me, but it still isn't clear. What is/was your strategy? Performance is tailing off of many funds lately that follow a value strategy. In particular, I'm sure you've noticed YAFFX has slightly underperformed as it has increased its cash position. To understand what you may want to sell, it would be helpful to know how each fund fit into your original plan.
One more thing, be careful of recent performance. For me, it is better to judge a fund when seemingly the world is coming to an end. In a severe downturn, would you have the stomach to hold on to SMVLX or FAIRX? Things have been nice lately, but the next storm is coming.
Perhaps consider using a broad index fund, and then add one or two concentrated funds that own a bit quirkier mix of stocks. SWPPX is a good option for index. Maybe think about adding GSRLX and holding on to SEQUX. They are rather dramatically different. Your others could be sold.
I agree with Bob C. An index fund + two focused funds seem about right. Too many funds and you end up with an index fund but paying active management fees.As to which funds I would go with Sequoia and Yachtman but thats more becauase of lack of knowledge of the others. I do know that the two I mentioned will underperform in strong markets and be quite good in flat or down markets.
My .02 is that the large cap field is the prime category NOT to hold multiple funds. Every time an analysis is done on managers adding value over indexes, large caps offer the least amount of alpha. Totally agree with Bob. The only way a LC is going to help you is to have a good stock picking manager with a focused agenda and one that will preserve capital when there is no value to be found. SEQUX, and I also think YAFFX and BBTEX, fit this bill. But you don't need more than one. Holding more than one, well... you lost your chance at adding alpha to that category.
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Regards,
Ted