ETF Investment Portfolios January 2015

Here are our favorite Exchange Traded Fund – ETF Investment Portfolios for January 2015.

ETF / Fund Name  Allocation% ReturnAllocation
ETF Investing PortfolioTickerClass10/1/20143 Mo1 Yr1/1/2015
Money Market FundMM2%0.00.12%
iShares Barclays 1-3 Year Credit BondCSJSTB8%0.20.78%
PIMCO Total Return ETFBONDITB6%1.76.66%
iShares Barclays 0-5 Year TIPS BondSTIPIPB8%(1.5)(1.2)8%
iShares Core Total US Bond Market ETFAGGITB6%1.96.06%
SPDR Barclays High Yield BondJNKHYB3%(2.5)0.33%
SPDR Barclays International Corporate BondIBNDGB4%(2.7)(5.1)4%
PowerShares Emerging Markets Sovereign DebtPCYEB3%0.19.23%
PowerShares Nasdaq 100QQQLCG3%4.919.23%
SPDR S&P DividendSDYLCV3%5.811.13%
SPDR S&P MidCap 400MDYMCC3%6.39.43%
WisdomTree MidCap EarningsEZMMCC3%6.38.43%
iShares Core S&P Small-Cap ETFIJRSCC3%9.85.93%
WisdomTree SmallCap EarningsEESSCC3%9.12.43%
iShares Russell Microcap IndexIWCMIC2%11.64.02%
iShares MSCI ACWI ex US IndexACWXIntl4%(4.4)(5.1)4%
SPDR S&P International Small CapGWXIntl4%(5.6)(7.8)4%
iShares MSCI Emerging Mkt Min Vol IndexEEMVEE4%(3.9)(0.2)4%
WisdomTree Emerging Mkts Small Cap DivDGSEE2%(6.1)(3.5)2%
iShares Dow Jones US Real EstateIYRRE6%12.226.76%
ProShares RAFI Long/ShortRALSL/S8%0.70.38%
Morgan Creek Global Tactical AAGTAAHdg4%1.53.44%
VelocityShares Volatility Hdgd Lg Cp ETFSPXHHdg4%2.27.84%
Proshares Managed Futures StrategyFUTSCom4%5.70.04%
Portfolio Return / Value100%1.94.0100%
ETF and Mutual Fund PortfolioTickerClass10/1/20143 Mo1 Yr1/1/2015
Money Market FundMM0.00.1
Baird Short-Term BondBSBSXSTB4%0.11.34%
iShares Barclays 3-7 Year Treasury BondIEIIGB4%1.33.24%
iShares Barclays 0-5 Year TIPS BondSTIPIPB4%(1.5)(1.2)4%
Metropolitan West Total Return BondMWTRXITB6%1.55.86%
Wells Fargo Short Term High Yield BondSTHBXHYB4%0.10.54%
Dreyfus International BondDIBAXGB6%(0.7)3.66%
Payden Emerging Markets Bond AdviserPYEWXEB4%(2.2)5.04%
SEIX Floating Rate High Income **SAMBXFRB4%(0.8)0.84%
Metropolitan West Unconstrained BondMWCRXAB4%0.23.44%
Parnassus Core Equity InvestorPRBLXLCC2%6.314.52%
PowerShares Nasdaq 100QQQLCG2%4.919.22%
SPDR S&P DividendSDYLCV2%5.811.12%
WisdomTree MidCap EarningsEZMMCC2%6.38.42%
Congress Mid Cap Growth RetailCMIDXMCG2%8.611.22%
WisdomTree MidCap DividendDONMCV2%8.015.32%
WisdomTree SmallCap EarningsEESSCC2%9.12.42%
iShares S&P SmallCap 600 GrowthIJTSCG2%9.14.02%
Aston/Silvercrest Small CapASCTXSCV2%10.04.32%
Westcore Micro Cap OpportunityWTMIXMIC2%11.32.52%
FMI InternationalFMIJXIntl4%0.54.64%
Wasatch International OpportunitiesWAIOXIntl4%(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**ABRZXHdg5%1.95.55%
Diamond Hill Long-Short **DIAMXL/S5%2.97.25%
Hancock Horizon Quant Long/Short **HHQAXL/S5%5.88.75%
AQR Managed Futures StrategyAQMNXMF5%9.79.35%
Portfolio Return / Value100%2.86.5100%
Easy ETF PortfolioTickerClass10/1/20143 Mo1 Yr1/1/2015
Money Market FundMM2%0.00.12%
iShares Barclays 1-3 Year Credit BondCSJSTB10%0.20.710%
iShares Barclays 0-5 Year TIPS BondSTIPIPB8%(1.5)(1.2)8%
iShares Barclays Intermediate Credit BondCIUITB10%0.83.910%
PowerShares International Corporate BondPICBITB10%(1.6)(1.2)10%
SPDR S&P DividendSDYLC6%5.811.16%
PowerShares Nasdaq 100QQQLC6%4.919.26%
WisdomTree MidCap EarningsEZMMC10%6.38.410%
WisdomTree SmallCap EarningsEESSC8%9.12.48%
PowerShares Intl Dividend AchieversPIDIntl12%(4.7)(1.3)12%
iShares MSCI Emerging Mkt Min Vol IndexEEMVEE6%(3.9)(0.2)6%
iShares Dow Jones US Real EstateIYRRE6%12.226.76%
Proshares Managed Futures StrategyFUTSMF6%5.70.06%
Portfolio Return / Value100%2.14.5100%

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.

 

Asset Allocation for 1st Quarter 2015

As we said last October, given the long term nature of our approach we will be making less frequent updates to our Favorite Mutual Funds list, Favorite ETFs , Model Mutual Fund Portfolios, and Model ETF Portfolios.  There are no changes to our Insightful Asset Allocation targets for the start of 2015, but the consolidation of our Mutual Fund list has reduced the number of Mutual Funds we are following and resulted in many changes to our Mutual Fund List and Mutual Fund Model Portfolios. In addition, we have replaced all but the best of the funds that are closed to new investors since in many cases you will not be able to invest in those funds at this time. We also replaced Scout International (UMBWX), one of our better performers in the current bull market, due to a change in the portfolio management. Look for some updates to our Favorite ETFs list on our next update.

Asset Allocation January 2015

Mutual Fund, ETF, and Financial Markets Update January 2015

If you only looked at the numbers you might think that 2014 was a fairly normal year as US stocks gained 12.6% while the US bond market added 6%. It is the path the markets took to get there that has investors on edge going into the new year. REITs and Long Treasury Bonds were the big winners for the year with the former up 30.3% and the latter gaining 25.1%. On the other end of the spectrum, International stocks fell (3.9%) as falling oil prices really took a toll on Emerging Market stocks, in particular for countries in Latin America.

Volatility in the financial markets has picked up, but last quarter’s action has just taken it back up to normal levels. Slower growth in emerging markets, almost no growth in Europe, and a significant over supply of oil contributed to a 14% gain for the US dollar in the second half of the year. Another factor adding to the dollar’s rise is the fact that rates are actually higher in the US than in most developed countries, which has driven foreign investors to invest in the US for higher yields, pushing bonds up and interest rates even lower. While lower oil prices are good for the consumer, the speed and depth of oils fall could put a significant dent in the improving US job market. It is with this backdrop that investors are cautious heading into 2015.

Investment Returns as of December 2014

Investment Returns as of December 2014

Our strongest Bond fund for the 4th quarter and 2014 was PIMCO Foreign Bond (USD-Hedged) (PFODX) which gained 3.1% for the quarter and 10.6% for the year thank for the most part to its hedge against the rising dollar. Metropolitan West Total Return Bond (MWTRX) picked up 1.5% for the quarter and 5.8% for the year, without a tailwind from the dollar. Fidelity New Markets Income (FNMIX) was our worst bond fund performer with a drop of (3.3%) this quarter, but it still managed to pick up 4.3% for 2014. Our only Bond fund in the red for 2014 was American Century Short Duration Inflation Protected Bond (APOIX) as the sharp drop in oil prices put a damper on inflation expectations, pulling the fund down (1.7%) for the year, all of which occurred in the 4th quarter.

Our top stock mutual funds in 2014 were RidgeWorth Large Cap Value Equity (STVTX) and Parnassus Mid-Cap (PARMX) which gained 11.1% and 11.3% respectively. Small cap stocks rebounded nicely in the 4th quarter with Fidelity Small Cap Discovery (FSCRX) adding 10.6% to finish the year with a 7.0% gain. Our best International mutual fund was Driehaus Emerging Markets Small Cap (DRESX) which lost just (2.0%) for the quarter, pulling down its return for the year to 5.8%. The big mutual fund winner was Fidelity Real Estate Investment (FRESX) which gained 13.8% for the quarter and 30.1% for the year. After a few years of waiting, keeping some money in Managed Futures finally paid off with Credit Suisse Managed Futures Strategy (CSAAX) leading the way with an 11.6% gain for the year. On the other hand, the biggest loser this quarter was Eagle MLP Strategy (EGLAX) which fell (14.2%) along with oil prices while still managing to hold on to a 3.8% gain for the year. This should set up a good buying opportunity as lower cost oil should not have a significant impact on these companies that deliver oil and gas.

Going into 2014 most investors were betting on rising interest rates, so the fact that iShares Barclays 20+ Year Treasury Bond ETF (TLT) gained 27.3% for the year was a big surprise to many. PowerShares Emerging Markets Sovereign Debt (PCY) finished much closer to expectations with a gain of 9.2%. A strong Technology sector helped PowerShares Nasdaq 100 (QQQ) to its 19.2% return in 2014 while WisdomTree MidCap Dividend (DON) had a nice 15.3% gain for the year. iShares S&P SmallCap 600 Value Index (IJS) rebounded nicely in the 4th quarter with a gain of 10.4%.

The dollar’s rise against the Euro hurt the German market more than any other developed nation’s stocks as iShares MSCI Germany Index (EWG) dropped (12.0%) in 2014. The falling price of oil hurt iShares MSCI Brazil Index (EWZ) even more as it fell (15.5%) this year. On the other hand, in spite of slowing growth in China, iShares FTSE China 25 Index Fund (FXI) gained 11.4%. The real extremes in 2014 were seen in sector ETFs as SPDR S&P Biotech (XBI) gained 45% while PowerShares DB Energy (DBE) lost an amazing (40.1%) in 2014.

Our Favorite Mutual Funds, Favorite ETFs, Mutual Fund Portfolios, ETF Investment Portfolios,, and Favorite Fidelity Funds have been updated through December 2014.