10
I’m a big fan of managers who have skin in the game,
so I thought I’d take some time to share my top hold-
ings with you.
Of the funds I own, all but one is a Morningstar
Medalist, and the one that is not will be gone before
year-end. I have about
70%
of my portfolio in act-
ively managed funds and
30%
in passively managed
funds. Virtually all of them have expense ratios that
are well below their peers.
Fidelity Spartan Total Market Index
FSTVX
is a
super cheap way to keep costs low in the core of your
portfolio. The fund charges just
0
.
06%
. At the time
I bought in February
2009
, it was the cheapest avail-
able option. Today,
Vanguard Total Stock Market
Index
VTSAX
is a better deal at
0
.
05%
in expenses.
Index-fund price competition has heated up for both
exchange-traded funds and open-end funds, so be sure
to check which will be your cheapest option, depend-
ing on your investment size and the platform you are
investing in. More important, whether you are paying
0
.
05%
or
0
.
09%
, you are getting a darn good deal.
Fidelity Spartan International Index
FSIVX
was
only charging
0
.
07%
when I bought it in February
2009
.
That figure has bounced up to
0
.
12%
as a waiver
expired, but it is still quite cheap. However, Vanguard
has leapfrogged this fund, too.
Vanguard Tax-
Managed International
VTMGX
charges
0
.
10%
and
carries a $
10
,
000
minimum, and
Vanguard Devel-
oped Markets Index
VDMAX
also charges
0
.
10%
for
a $
10
,
000
minimum. By lowering the fees and
minimum investments in its Admiral share classes,
Vanguard has raised the bar.
Vanguard Primecap Core
VPCCX
is an outstanding
fund with a tiny
0
.
50%
price tag. It’s closed, but
Vanguard Capital Opportunity
VHCOX
(which I also
own) has recently reopened. There’s a lot of overlap
between the two, as the excellent Primecap team in
Pasadena, Calif., runs both funds. I’ve owned Capital
Opportunity in a Roth
IRA
since
1998
, when Primecap
took the helm. However, when I wanted to invest on
the taxable side, the fund was closed, so I chose Prime-
cap Core in
2005
. When the best growth investors
come with one of the lowest expense ratios, it’s a
no-brainer.
Vanguard Tax-Managed Capital Appreciation
VTCLX
is another super cheap passive fund that I’ve
owned for a good while. Index funds are pretty tax-
efficient to begin with, but Vanguard’s tax-managed
funds are a little better. They follow an index closely
but have the flexibility to realize losses in order to
avoid capital gains distributions. They have not yet
made any capital gains distributions, so it would
seem they are doing a good job. You can boost your
returns significantly by lowering fees and postpon-
ing taxes so that your investment can compound in
the meantime; this fund is a good way to do both.
I’ve owned
Dodge & Cox International
DODFX
for
more than
10
years, and I haven’t flinched, even when
it had a lousy
2008
. Given that the fund’s
10
-year
returns are in the top decile of the category, I’m glad I
stuck with it. There’s really a lot in common between
Dodge
&
Cox and Primecap; you have two groups
where very smart people stay for their whole careers.
It’s rare to see any managers or analysts leave either
firm, both of which are employee-owned. You have
managers who stick to their strategies through good
and bad, and they give investors a good deal on
fees to boot.
Primecap Odyssey Aggressive Growth
POAGX
is
in my
401
(k), so yes, it’s my third fund from Primecap.
While most of the firm’s funds have a lot of overlap,
this one stands out, as it is much smaller in market
cap and much more volatile. Having seen how well
Vanguard Capital Opportunity did in its early years, I
was happy to buy this in my
401
(k).
œ
My Top Holdings
The Contrarian
|
Russel Kinnel
Our Contrarian Approach
I go against the grain to find
overlooked funds that may be
ready to rally.
