2
we rate seven bond funds from American, and they all
earn Morningstar Analyst Ratings of Neutral.
For small caps, American has just one very
diffuse world-stock fund that doesn’t really have
that much appeal.
On the bond side, you’ve got lots of options to diver-
sify your portfolio, but here are three worth a look
for no-load and load. On the load side, there’s
Frank-
lin Federal Intermediate-Term Tax-Free Income
FKITX
. Franklin is one of the better muni managers on
the load side. It has modest costs and robust
resources for doing research.
On the taxable side, let’s stay with the Franklin Temp-
leton family and buy the bold border-crossing
Temp-
leton Global Bond
TPINX
run by Michael Hasenstab.
The strategy is to combine currency and yield plays in
order to deliver strong long-term returns. It’s got a
fair amount of risk, though, so this will work only as a
long-term holding. Now, let’s dial down the risk by
purchasing
PIMCO Real Return
PRTNX
for some well-
run
TIPS
exposure.
On the no-load side, we can switch to
Harbor Real
Return
HARRX
for the same
PIMCO
strategy and
manager. For munis you can use the same ones I men-
tioned for
PIMCO
, but consider
Fidelity Intermediate
Municipal Income
FLTMX
if you want a little less
interest-rate risk. Finally, we’ll round things out with
T. Rowe Price New Income
PRCIX
. This interme-
diate-term bond fund is a typical T. Rowe fund when
it comes to caution and diversification. The fund
tends to outperform in difficult markets and have more-
middling returns when risk is rewarded.
Know Your Fund Company’s Achilles’ Heel
Continued From Cover
Funds for Rounding Out a Family-Centric Portfolio
Name
Ticker
Morningstar
Analyst Rating Morningstar Category
Total Ret %
Rank Cat
10 Yr (Daily)
Total Ret %
Rank Cat
15 Yr (Daily)
Prospectus
Net Expense
Ratio %
Max Front
Load %
Top Manager
Ownership Level
Akre Focus
AKREX
´
Mid-Cap Growth
— — 1.40
— More than $1M
Artisan Global Value
ARTGX
•
World Stock
— — 1.52
— More than $1M
Causeway International Value
CIVVX
Œ
Foreign Large Blend
22
— 1.24
— More than $1M
Dodge & Cox Global Stock
DODWX
Œ
World Stock
— — 0.65
— More than $1M
Dodge & Cox Income
DODIX
Œ
Intermediate-Term Bond
25
16
0.43
— More than $1M
Fidelity Intermediate Municipal Income FLTMX
Œ
Muni National Interm
29
22
0.37
— $100,001–$500,000
Fidelity Tax-Free Bond
FTABX
Œ
Muni National Long
6
— 0.25
— $100,001–$500,000
FMI Focus
FMIOX
•
Small Blend
22
1
1.26
— More than $1M
FPA Crescent
FPACX
Œ
Moderate Allocation
2
2
1.26
— More than $1M
Franklin Federal Tax-Free Income
FKTIX
— Muni National Long
12
20
0.61
4.25
0
Harbor Real Return
HARRX
Œ
Inflation-Protected Bond
— — 0.59
— 0
Longleaf Partners
LLPFX
•
Large Blend
77
11
0.91
— More than $1M
Oakmark Select
OAKLX
Œ
Large Blend
28
2
1.05
— More than $1M
PIMCO All Asset
PASDX
Œ
World Allocation
55
— 1.29
— 0
PIMCO Investment Grade Corp Bd
PIGIX
•
Intermediate-Term Bond
1
— 0.50
— $1–$10,000
PIMCO Real Return
PRTNX
Œ
Inflation-Protected Bond
13
20
0.85
3.75
$50,001–$100,000
PIMCO Unconstrained Bond
PUBDX
´
Nontraditional Bond
— — 1.30
— More than $1M
Sequoia
SEQUX
Œ
Large Growth
19
11
1.03
— More than $1M
T. Rowe Price New Income
PRCIX
•
Intermediate-Term Bond
33
35
0.61
— $100,001–$500,000
Templeton Global Bond
TPINX
Œ
World Bond
1
4
0.90
4.25
More than $1M
Vanguard Interm-Term Tx-Ex
VWITX
•
Muni National Interm
25
26
0.20
— N/A
Vanguard Tax-Managed Intl
VTMGX
Œ
Foreign Large Blend
34
— 0.10
— 0
Vanguard Total Stock Mkt Idx
VTSAX
Œ
Large Blend
18
— 0.05
— $500,001–$1,000,000
Data as of Sept. 24, 2013.
