Ouch!
June was an ugly month, with many funds giving back the gains they’d eked out over the previous five months. The old investing adage “sell in May and go away” would’ve been good advice, provided someone has a crystal ball to tell us when to get back in. Though knocked down a few pegs, Capital Appreciation is hanging in the first quintile.
And now for the tale of the tape. Avert your eyes if you’re squeamish.
first quintile
Oakmark Equity & Income I (OAKBX): +2.42%
Value Line Income & Growth Fund (VALIX): +1.15%
John Hancock Balanced A (SVBAX): -0.27%
Ivy Asset Strategy Y (WASYX): -0.65%
Janus Balanced (JABAX): -2.25%
T. Rowe Price Capital Appreciation (PRWCX): -3.42%
Buffalo Balanced (BUFBX): -3.50%
State Farm Balanced (STFBX): -4.82%
AARP Moderate Report (AAMDX): -4.90%
Vanguard Wellington (VWELX): -5.52%
GE Moderate Allocation Fund (GMALX): -5.68%
Waddell & Reed Adv Asset Strategy A (UNASX): -5.68%*
second quintile
DFA Global 60/40 I (DGSIX): -5.93%
Vanguard Balanced Index (VBINX): -6.08%
T. Rowe Price Balanced (RPBAX): -6.17%
T. Rowe Price Retirement 2010 Fund (TRRAX): -6.42%
Vanguard Target Retirement 2015 (VTXVX): -6.51%
Fidelity Balanced (FBALX): -6.54%
Pax World Balanced (PAXWX): -6.76%
Mairs & Power Balanced (MAPOX): -6.78%
Vanguard STAR (VGSTX): -6.78%
Fidelity Freedom 2020 (FFFDX): -7.07%
Elfun Diversified (ELDFX): -7.17%
third quintile
GAMCO Westwood Income AAA (WESRX): -7.23%
**Vanguard 60/40: -7.41%
Nuveen Balanced Stock & Bond R (NNSRX): -7.60%
Fidelity Puritan (FPURX): -7.79%
AARP Aggressive (AAGSX): -7.96%
Loomis Sayles Global Markets Y (LSWWX): -8.02%
First Eagle Global A (SGENX): -8.03%*
American Funds American Balanced R4 (RLBEX): -8.46%
TIAA-CREF Inst Managed Alloc II Retail (TIMRX): -8.62%
Russell LifePoints Growth Strategy S (RALSX): -8.85%
Manning & Napier Extended Term (MNBAX): -8.90%
fourth quintile
Eaton Vance Balanced A (EVIFX): -9.78%*
Transamerica Premier Balanced Inv (TBAIX): -10.76%
American Funds Capital Inc Bldr C (CIBCX): -10.97%*
Calvert Social Investment Balanced A (CSIFX): -11.24%*
Dodge & Cox Balanced (DODBX): -11.31%
MFS Total Return B (MTRBX): -11.94%*
Dreyfus Premier Balanced Opportunity A (DBOAX): -12.24%*
Putnam Asset Allocation Balanced A (PABAX): -13.15%*
Morgan Stanley Strategist B (SRTBX): -13.15%*
Legg Mason Partners CapInc A (SOPAX): -13.28%*
Morgan Stanley Strategist Fund A (SRTAX): -13.51%*
fifth quintile
Calamos Growth & Income A (CVTRX): -13.86%*
Evergreen Asset Allocation A (EAAFX): -14.40%*
AFBA Five Star Balanced A (AFSAX): -14.57%*
Lord Abbett Balanced Strategy A (LABFX): -14.77%*
American Funds Capital Inc Bldr A (CAIBX): -15.21%*
American Funds American Balanced A (ABALX): -15.62%*
Van Kampen Equity and Income A (ACEIX): -15.78%*
Delaware Balanced A (DELFX): -16.02%*
Wells Fargo Advantage Growth Balanced A (WFGBX): -16.27%*
Oppenheimer Quest Balanced B (QGRBX): -17.08%*
Franklin Templeton Growth Target A (FGTIX): -17.29%*
disqualified horses
Permanent Portfolio (PRPFX): +5.52%
FPA Crescent (FPACX): +2.97%
Leuthold Core Investment (LCORX): +1.77%
Greenspring (GRSPX): -0.04%
Leuthold Asset Allocation (LAALX): -2.17%
Bruce (BRUFX): -3.41%
Vanguard Tax Managed Balanced Fund (VTMFX): -4.47%
Fairholme (FAIRX): -5.90%
Marsico Flexible (MFCFX): -5.98%
BlackRock Global Allocation A (MDLOX): -7.17%*
Utopia Core (UTCRX): -7.41%
BlackRock Asset Allocation Inv A (PCBAX): -9.04%*
Auxier Focus (AUXFX): -10.17%
Fidelity Magellan (FMAGX): -11.87%
American Century Equity Income A (TWEAX): -16.03%*
(The disqualifed horses have failed to meet criterion of large cap with between 50-75% equities—they’re included here by request.)
*load adjusted return
**portfolio of three Vanguard index funds:
45% Total Stock Market (VTSMX) $38.35
15% Total International (VGTSX) $19.89
40% Total Bond (VBMFX) $10.16
Since we’re at the halfway mark for 2008, it might be interesting to speculate on why Oakmark Equity & Income I (OAKBX) is topping the list. Here’s my theory. Take a gander at the top 25 holdings for OAKBX:
XTO Energy, Inc.: +33.89% ytd
US Treasury Note 2.375%
US Treasury Note 0.875%
US Treasury Note 2%
US Treasury Note 4.875%
US Treasury Note 5.125%
US Treasury Note 4.875%
Nestle SA ADR: -1.34% ytd
Apache Corporation: +29.71% ytd
CVS Caremark Corporation: -0.14% ytd
Newfield Exploration Company: +23.81% ytd
General Dynamics: -4.66% ytd
EnCana Corporation: +35.09% ytd
Medtronic, Inc.: +3.47% ytd
Diageo PLC ADR: -12.84% ytd
US Treasury Note 5.125%
US Treasury Note 5%
US Treasury Note 4.75%
E.W. Scripps Company: -7.14% ytd
US Treasury Note 4%
US Treasury Note
Canada Govt 3.75%
DISH Network Corporation Class A: -13.77% ytd
Ingersoll-Rand Company, Ltd.: -18.76%
Avon Products: -7.95% ytd
That’s a whole lotta bonds—forgive the pun, OAKBX is loaded for bear. Also, there’s a heavy stake in energy, the sector that happens to be doing well now. So by chance or design, OAKBX is positioned very well for the current market.
I welcome other opinions.
(By the way, I'm amused that DISH Network is down 13.77%. I have DISH Network in my home, and we lose the signal every time it rains. Funny how DISH Network never mentions this in their advertising.)
Finally, I’m not sure this article has made the rounds on the T. Rowe Price forum—it’s a March 2008 Forbes interview with David Giroux, manager of Capital Appreciation.
