Mutual Fund, ETF, and Financial Markets Update July 2015

Volatility kicked up a notch in the second quarter of 2015 thanks to concerns about the economy of China, and possible defaults in Greece and Puerto Rico. The result was not good news for stocks or bonds. June’s losses essentially wiped out gains earlier in the quarter in the stock market which finished slightly above the flat line with a gain of 0.1%. The expectation that the FED will finally raise interest rates this year took bonds down (1.7%) for the quarter. Rising rates were also a significant factor in the big loss for Real Estate in the form of REITS which fell (10.0%) over the last three months. Aided by a falling US Dollar, oil rebounded for major gains and international stocks and bonds held on to positive returns this quarter. Small Cap growth stocks added 2.0% this quarter while Mid Cap value stocks went in the opposite direction falling (2.0%) over the last three months.

Investment Returns as of June 2015

Investment Returns as of June 2015

It was an unusual quarter for financial markets as the uncertainty did not result in the typical flight to quality. Instead interest rates rose, which caused a fall of (9.6%) by iShares Barclays 20+ Year Treasury Bond (TLT). While rising rates often help the US dollar, you could not tell that from PowerShares DB US Dollar Index Bullish (UUP), which fell (3.4%). Smaller continued to be better as iShares Russell Microcap Index (IWC) picked up 3.1% while Large Cap ETF PowerShares Nasdaq 100 (QQQ) gained 1.6%. Given those two returns it is surprising that SPDR S&P MidCap 400 (MDY) actually lost (1.1%).

iShares MSCI Brazil Index (EWZ) turned out to be our best performing country ETF with a gain of 6.4% while iShares MSCI Malaysia Index (EWM) was the one to avoid as it lost (7.7%). Commodities turned up in June with PowerShares DB Agriculture (DBA) picking up 5.5% while SPDR S&P Biotech (XBI) was the top sector with a gain of 12.0%. On the other end of the spectrum, iShares FTSE NAREIT Real Estate 50 (FTY) lost (9.7%).

The fall in the US Dollar hurt international funds that are hedging against the dollar like PIMCO Foreign Bond (USD-Hedged) (PFODX) which lost (4.1%). On the other hand, that help unhedged funds like Fidelity New Markets Income (FNMIX) which picked up 1.5%. Some of our better domestic equity mutual funds were Rice Hall James Small Cap (RHJMX) which added 3.9%, Fidelity Low-Priced Stock (FLPSX) which gained 2.5% and Fidelity Focused Stock (FTQGX) which returned 0.1%. The falling dollar was good news for investors in

International stocks as Fidelity International Growth (FIGFX) added 0.7%, Wasatch International Opportunities (WAIOX) returned 3.2% and Driehaus Emerging Markets Small Cap (DRESX) grew by 3.0%. International Real Estate took a much smaller hit than domestic REITs as Third Avenue Real Estate Value (TVRVX) lost only (1.5%). In the alternatives space Boston Partners Global Long/Short (BGRSX) gained 4.0% while Aspen Managed Futures Strategy (MFBPX) gave back less of its 2014 gains than most Managed Futures funds with a drop of (5.2%).

Our Favorite Mutual Funds, Favorite ETFs, Mutual Fund Portfolios, ETF Investment Portfolios,, and Favorite Fidelity Funds have been updated through June 2015.

Mutual Fund Portfolios April 2015

Here are our favorite Mutual Funds Investment Portfolios for April 2015.

Fund Name  Allocation% ReturnAllocation
No Load Mutual Fund PortfolioTickerClass1/1/20153 Mo1 Yr4/1/2015
Money Market FundMM2%0.00.12%
Baird Short-Term BondBSBSXSTB4%0.71.44%
American Century Short Dur Infl Prot BondAPOIXIPB4%0.7(1.1)4%
Metropolitan West Total Return BondMWTRXITB4%1.35.44%
Wells Fargo Short Term High Yield BondSTHBXHYB4%1.91.74%
SEIX Floating Rate High Income **SAMBXFRB4%2.42.24%
Dreyfus International BondDIBAXGB6%(0.1)0.76%
Payden Emerging Markets Bond AdviserPYEWXEB4%1.93.94%
Metropolitan West Unconstrained BondMWCRXUB4%0.62.54%
BlackRock Global Long/Short CreditBGCAXL/S B4%1.61.24%
Parnassus Core Equity InvestorPRBLXLCC3%(0.8)12.73%
RidgeWorth Large Cap Value EquitySTVTXLCV3%(1.9)7.33%
Scout Mid CapUMBMXMCC3%6.06.93%
Congress Mid Cap Growth RetailCMIDXMCG3%4.314.43%
Hodges Small CapHDPSXSCG3%4.68.83%
Aston/Silvercrest Small CapASCTXSCV3%4.38.23%
Westcore Micro Cap OpportunityWTMIXMIC2%1.53.92%
FMI InternationalFMIJXIntl4%7.910.94%
Wasatch International OpportunitiesWAIOXISC4%5.25.54%
Harding Loevner Emerging MarketsHLEMXEE2%1.4(1.0)2%
Driehaus Emerging Markets Small CapDRESXEE2%4.23.32%
Harding Loevner Frontier Emerg MktsHLMOXEE2%(3.0)(4.6)2%
AMG Managers Real Estate SecuritiesMRESXRE4%6.710.84%
Third Avenue Real Estate Value InvestorTVRVXRE2%3.010.02%
Invesco Balanced-Risk Allocation**ABRZXHdg4%3.37.54%
Merger FundMERFXHdg4%1.42.34%
Diamond Hill Long-Short **DIAMXL/S E4%(0.2)5.24%
Hancock Horizon Quant Long/Short **HHQAXL/S E4%2.49.74%
AQR Managed Futures StrategyAQMNXMF4%8.526.44%
Portfolio Return / Value100%2.55.8100%
Fidelity Investments PortfolioTickerClass1/1/20153 Mo1 Yr4/1/2015
Cash ReservesFDRXXMM2%0.00.12%
Limited Term BondFJRLXSTB6%1.12.36%
Intermediate GovernmentFSTGXIGB6%1.23.16%
Strategic Real ReturnFSRRXIPB6%0.1(2.9)6%
Total BondFTBFXITB6%1.95.36%
High IncomeSPHIXHYB6%2.31.46%
Floating Rate High IncomeFFRHXFRB6%2.01.56%
New Markets IncomeFNMIXEMB6%0.81.46%
Mega Cap StockFTQGXLCG12%4.87.812%
Low Priced StockFLPSXMCC10%1.87.410%
Small Cap Discovery*FSCRXSCC8%1.98.58%
International GrowthFIGFXIntl8%6.54.48%
International Small CapFISMXISC6%5.5(0.2)6%
Real Estate IncomeFRIFXRE8%2.69.68%
Real Estate InvestmentFRESXRE4%4.524.24%
Portfolio Return / Value100%2.75.1100%
Easy Mutual Fund PortfolioTickerClass1/1/20153 Mo1 Yr4/1/2015
Money Market FundMM2%0.90.12%
Baird Short-Term BondBSBSXSTB10%0.71.410%
American Century Short Dur Infl Prot BondAPOIXIPB6%0.7(1.1)6%
Metropolitan West Total Return BondMWTRXITB12%1.35.412%
Dreyfus International BondDIBAXGB10%(0.1)0.710%
Parnassus Core Equity InvestorPRBLXLC12%(0.8)12.712%
Congress Mid Cap Growth RetailCMIDXMC12%4.314.412%
Aston/Silvercrest Small CapASCTXSC10%4.38.210%
FMI InternationalFMIJXIntl12%7.910.912%
Harding Loevner Emerging MarketsHLEMXEE6%1.4(1.0)6%
AMG Managers Real Estate SecuritiesMRESXRE8%6.710.88%
Portfolio Return / Value100%2.77.0100%
Fidelity NTF Mutual Fund PortfolioTickerClass1/1/20153 Mo1 Yr4/1/2015
Money Market Fund (Cash Reserves)FDRXXMM2%0.04,7962%
Baird Short-Term BondBSBSXSTB4%0.79,6624%
Fidelity Intermediate Government IncFSTGXIGB4%1.29,7114%
Fidelity Strategic Real ReturnFSRRXIPB4%0.19,6034%
Metropolitan West Total Return BondMWTRXITB4%1.314,5816%
Fidelity High IncomeSPHIXHYB4%2.39,8094%
Eaton Vance Floating RateEVBLXFRB4%1.89,7644%
Dreyfus International BondDIBAXGB6%(0.1)9,5864%
Fidelity New Markets IncomeFNMIXEB4%0.89,6644%
BlackRock Global Long/Short CreditBGCAXL/S B4%1.69,7494%
Parnassus Core Equity InvestorPRBLXLCC2%(0.8)4,7592%
Fidelity Focused StockFTQGXLCG2%4.85,0262%
RidgeWorth Large Cap Value EquitySTVTXLCV2%(1.9)4,7052%
Scout Mid CapUMBMXMCC2%6.05,0822%
Baird MidCap InvBMDSXMCG2%4.35,0042%
Fidelity Low-Priced StockFLPSXMCV2%1.84,8812%
Fidelity Small Cap Discovery *FSCRXSCC2%1.94,8892%
Rice Hall James Small CapRHJMXSCG2%6.55,1062%
Aston/Silvercrest Small CapASCTXSCV2%4.35,0032%
Westcore Micro Cap OpportunityWTMIXMIC2%1.54,8682%
Fidelity International GrowthFIGFXIntl6%6.515,3206%
Wasatch International OpportunitiesWAIOXIntl4%5.210,0934%
Harding Loevner Emerging MarketsHLEMXEE2%1.44,8642%
Driehaus Emerging Markets Small CapDRESXEE4.24,9992%
Harding Loevner Frontier Emerg MktsHLMOXEE2%(3.0)4,6502%
Fidelity Real Estate IncomeFRIFXRE3%2.69,8404%
Third Avenue Real Estate Value InvestorTVRVXRE3%3.09,8774%
Merger FundMERFXHdg4%1.49,7274%
Wasatch Long/ShortFMLSXL/S E12%(1.7)14,1466%
AQR Managed Futures StrategyAQMNXMF4%8.515,6176%
Portfolio Return / Value100%1.9245,382100%
* Funds Closed to New Investors. If you do not already own this fund, you may choose another fund in the same category for your portfolio.
** Loaded funds that are available from some brokers, usually Schwab and sometimes Fidelity, without a load fee.

Mutual Fund, ETF, and Financial Markets Update April 2015

In many ways, the first quarter of 2015 looked a lot like the last quarter of 2014. Oil prices continued to fall and the US dollar continued to rise. While the direction of both trends continued, the strength of the moves showed signs of slowing down. While the overall market gained 1.8%, size and style mattered this quarter. Small Cap Growth stocks picked up 6.6% while Large Cap value actually lost (0.7%). Quantitative easing by European central banks helped International Stocks pick up 3.5% in spite of the fact that the rising dollar provided a strong headwind. Bonds continue to perform well, even as investors speculate on when the US Fed is going to start raising interest rates.

Investment Returns as of March 2015

Investment Returns as of March 2015

Our best performing bond funds were the two International Bond funds that hedge against the US dollar as both Payden Global Fixed Income (PYGFX) and PIMCO Foreign Bond (USD-Hedged) (PFODX) gained 2.5%. SEIX Floating Rate High Income (SAMBX) was not far behind with a 2.4% return, while Fidelity Total Bond (FTBFX) picked up 1.9%.

It was a good quarter for most stock funds, in spite of a difficult March for many. Some of our best performers were Fidelity Focused Stock (FTQGX) with a 4.8% return, Scout Mid Cap (UMBMX) with a 6.0% gain, and Rice Hall James Micro Cap (RHJSX) which added 6.6%. FMI International (FMIJX) was our best Non-US fund with a 7.9% return, while AMG Managers Real Estate Securities (MRESX) was our top sector fund with a 6.7% gain. Our best performer was Credit Suisse Managed Futures Strategy (CSAAX) which added 10.9% in the first three months of 2015.

Falling interest rates helped push iShares Barclays 20+ Year Treasury Bond ETF (TLT) up 4.2% while a rebound for Emerging Market Bonds pushed iShares JPMorgan Emerging Markets Bond ETF (EMB) up 2.9%. On the other hand, the dollar’s continued strength contributed to a difficult quarter for developed country bonds as PowerShares International Corporate Bond (PICB) fell (6.5%).

Some of our better performing stock ETFs were PowerShares Buyback Achievers (PKW) which gained 2.7%, iShares S&P MidCap 400 Growth Index (IJK) which added 7.7%, and iShares Russell 2000 Growth Index (IWO) which rose 6.7%. There was quite a contrast between country ETFs this quarter as iShares MSCI Japan Index (EWJ) returned 11.5% which iShares MSCI Brazil Index (EWZ) lost (14.2%).

Our top sector ETF in the first quarter was SPDR S&P Biotech (XBI) which picked up 21.1%, while PowerShares DB Agriculture (DBA) (11.1%) as commodities continued to lose ground. PowerShares DB US Dollar Index Bullish (UUP) was up 8.1% this quarter. That does not sound like a lot compared to some of the real big movers, but for the US Dollar that’s quite a significant move. That’s quite a headwind for investors looking for returns outside of the United States.

Our Favorite Mutual Funds April 2015, Favorite ETFs April 2015, Mutual Fund Portfolios, ETF Investment Portfolios,, and Favorite Fidelity Funds have been updated through March 2015.

Mutual Fund Portfolios January 2015

Here are our favorite Mutual Funds Investment Portfolios for January 2015.

Fund Name  Allocation% ReturnAllocation
No Load Mutual Fund PortfolioTickerClass10/1/20143 Mo1 Yr1/1/2015
Money Market FundMM2%0.00.12%
Baird Short-Term BondBSBSXSTB4%0.11.34%
American Century Short Dur Infl Prot BondAPOIXIPB4%(1.7)(1.7)4%
Metropolitan West Total Return BondMWTRXITB4%1.55.84%
Wells Fargo Short Term High Yield BondSTHBXHYB4%0.10.54%
SEIX Floating Rate High Income **SAMBXFRB4%(0.8)0.84%
Dreyfus International BondDIBAXGB6%(0.7)3.66%
Payden Emerging Markets Bond AdviserPYEWXEB4%(2.2)5.04%
Metropolitan West Unconstrained BondMWCRXUB4%0.23.44%
BlackRock Global Long/Short CreditBGCAXL/S B4%(0.5)0.74%
Parnassus Core Equity InvestorPRBLXLCC3%6.314.53%
RidgeWorth Large Cap Value EquitySTVTXLCV3%4.811.13%
Scout Mid CapUMBMXMCC3%1.34.13%
Congress Mid Cap Growth RetailCMIDXMCG3%8.611.23%
Hodges Small CapHDPSXSCG3%1.66.13%
Aston/Silvercrest Small CapASCTXSCV3%10.04.33%
Westcore Micro Cap OpportunityWTMIXMIC2%11.32.52%
FMI InternationalFMIJXIntl4%0.54.64%
Wasatch International OpportunitiesWAIOXISC4%(3.6)3.14%
Harding Loevner Emerging MarketsHLEMXEE2%(3.9)(1.7)2%
Driehaus Emerging Markets Small CapDRESXEE2%(2.0)5.82%
Harding Loevner Frontier Emerg MktsHLMOXEE2%(8.1)5.82%
AMG Managers Real Estate SecuritiesMRESXRE4%15.331.54%
Third Avenue Real Estate Value InvestorTVRVXRE2%4.812.92%
Invesco Balanced-Risk Allocation**ABRZXHdg4%1.95.54%
Merger FundMERFXHdg4%(0.6)1.44%
Diamond Hill Long-Short **DIAMXL/S E4%2.97.24%
Hancock Horizon Quant Long/Short **HHQAXL/S E4%5.88.74%
AQR Managed Futures StrategyAQMNXMF4%9.79.34%
Portfolio Return / Value100%2.15.7100%
Fidelity Investments PortfolioTickerClass10/1/20143 Mo1 Yr1/1/2015
Cash ReservesFDRXXMM2%0.00.12%
Limited Term BondFJRLXSTB6%0.32.16%
Intermediate GovernmentFSTGXIGB6%0.82.66%
Strategic Real ReturnFSRRXIPB6%(1.3)1.16%
Total BondFTBFXITB6%1.25.56%
High IncomeSPHIXHYB6%(0.5)1.56%
Floating Rate High IncomeFFRHXFRB6%(0.8)0.46%
New Markets IncomeFNMIXEMB6%(3.3)4.36%
Mega Cap StockFTQGXLCG12%1.74.612%
Low Priced StockFLPSXMCC10%4.27.710%
Small Cap Discovery*FSCRXSCC8%10.67.08%
International GrowthFIGFXIntl8%(0.6)(3.1)8%
International Small CapFISMXISC6%(1.6)(5.4)6%
Real Estate IncomeFRIFXRE8%4.112.58%
Real Estate InvestmentFRESXRE4%13.830.14%
Portfolio Return / Value100%2.04.6100%
Easy Mutual Fund PortfolioTickerClass10/1/20143 Mo1 Yr1/1/2015
Money Market FundMM2%2.10.12%
Baird Short-Term BondBSBSXSTB10%0.11.310%
American Century Short Dur Infl Prot BondAPOIXIPB6%(1.7)(1.7)6%
Metropolitan West Total Return BondMWTRXITB12%1.55.812%
Dreyfus International BondDIBAXGB10%(0.7)3.610%
Parnassus Core Equity InvestorPRBLXLC12%6.314.512%
Congress Mid Cap Growth RetailCMIDXMC12%8.611.212%
Aston/Silvercrest Small CapASCTXSC10%10.04.310%
FMI InternationalFMIJXIntl12%0.54.612%
Harding Loevner Emerging MarketsHLEMXEE6%(3.9)(1.7)6%
AMG Managers Real Estate SecuritiesMRESXRE8%15.331.58%
Portfolio Return / Value100%3.97.6100%
Fidelity NTF Mutual Fund PortfolioTickerClass10/1/20143 Mo1 Yr1/1/2015
Money Market Fund (Cash Reserves)FDRXXMM2%0.04,7962%
Baird Short-Term BondBSBSXSTB4%0.19,5924%
Fidelity Intermediate Government IncFSTGXIGB4%0.89,5924%
Fidelity Strategic Real ReturnFSRRXIPB4%(1.3)9,5924%
Metropolitan West Total Return BondMWTRXITB4%1.514,3886%
Fidelity High IncomeSPHIXHYB4%(0.5)9,5924%
Eaton Vance Floating RateEVBLXFRB4%(0.4)9,5924%
Dreyfus International BondDIBAXGB6%(0.7)9,5924%
Fidelity New Markets IncomeFNMIXEB4%(3.3)9,5924%
BlackRock Global Long/Short CreditBGCAXL/S B4%(0.5)9,5924%
Parnassus Core Equity InvestorPRBLXLCC2%6.34,7962%
Fidelity Focused StockFTQGXLCG2%1.74,7962%
RidgeWorth Large Cap Value EquitySTVTXLCV2%4.84,7962%
Scout Mid CapUMBMXMCC2%1.34,7962%
Baird MidCap InvBMDSXMCG2%3.84,7962%
Fidelity Low-Priced StockFLPSXMCV2%4.24,7962%
Fidelity Small Cap Discovery *FSCRXSCC2%10.64,7962%
Rice Hall James Small CapRHJMXSCG2%8.94,7962%
Aston/Silvercrest Small CapASCTXSCV2%10.04,7962%
Westcore Micro Cap OpportunityWTMIXMIC2%11.34,7962%
Fidelity International GrowthFIGFXIntl6%(0.6)14,3886%
Wasatch International OpportunitiesWAIOXIntl4%(3.6)9,8804%
Harding Loevner Emerging MarketsHLEMXEE2%(3.9)4,7962%
Driehaus Emerging Markets Small CapDRESXEE(2.0)4,7962%
Harding Loevner Frontier Emerg MktsHLMOXEE2%(8.1)4,7962%
Fidelity Real Estate IncomeFRIFXRE3%4.19,5924%
Third Avenue Real Estate Value InvestorTVRVXRE3%4.89,5924%
Merger FundMERFXHdg4%(0.6)9,5924%
Wasatch Long/ShortFMLSXL/S E12%(2.8)14,3886%
AQR Managed Futures StrategyAQMNXMF4%9.714,3886%
Portfolio Return / Value100%1.0239,800100%
* Funds Closed to New Investors. If you do not already own this fund, you may choose another fund in the same category for your portfolio.
** Loaded funds that are available from some brokers, usually Schwab and sometimes Fidelity, without a load fee.