53 / 708
2
full-throttle on oil production in order to hurt its chief
rival for dominance in the Middle East.
Bankruptcies and bond defaults are soaring in com-
modity-land. Arch Coal filed for bankruptcy in January,
making it the fourth major coal company to do so.
This has put stress on high-yield and bank-loan funds
as energy is a significant part of their markets.
Although most conservative high-yield funds have been
light on energy, they’ve all felt some degree of pain.
Investors have likewise responded by pulling billions
out of bank-loan and high-yield funds to the tune
of
$20
billion and
$11
billion, respectively, in
2015
.
Emerging Markets—A Regular Bear Market
It stands to reason that slowing Chinese growth would
have an impact on emerging markets, as China is
the largest one. But it goes beyond that. Many other
big emerging markets are commodities producers
and therefore have been pummeled by the plunging
prices. Many of the Latin American countries, as
well as Russia and many Middle Eastern nations,
are dependent upon commodities.
Vanguard Emerging Markets Stock Index
VEMAX
is
down
9%
annualized over the past three years,
5%
over the past five, and up
2%
over the past
10
. Things
are not quite as bleak for some of my favorite Asia
funds such as
Matthews Asia Dividend
MAPIX
, which
has slightly positive trailing returns owing to its defen-
sive nature and a lack of exposure to Brazil and Russia.
Developed-Markets Equities and High Yield—
A Correction
Stocks and high-yield bonds have given back a chunk
of their gains going back to the
2009
rally, but if
The Corrections
Continued From Cover
The 25 Hardest-Hit
Name
Ticker
Morningstar
Analyst Rating
Total
Rtn % YTD
(Mo-End)
Total Rtn %
Rank Cat YTD
(Daily)
Return % (Day
to Day) 05-17-15
to 01-31-16
Notes
Vanguard Precious Metals and Mining
VGPMX
—
-2.20
91
-37.24
A rebound in commodities could be explosive for this fund.
DFA Emerging Markets Value
DFEVX
´
-5.64
50
-29.96
A low-cost play on emerging markets.
Matthews China
MCHFX
´
-14.88
91
-29.21
More pure play on China, which hurt in January.
Harbor Commodity Real Return ST
HACMX
•
-1.79
44
-28.50
Invests in energy, agriculture, and metals.
PIMCO Commodity Real Ret Strat
PCRDX
•
-1.62
34
-28.47
Same as above Harbor Fund.
Vanguard Emerging Mkts Stock Idx
VEMAX
´
-6.00
63
-28.09
Soon to have one third of assets in China.
Delafield Fund
DEFIX
—
-9.06
97
-27.73
A big materials bet is killing this fund.
Oppenheimer Gold & Special Minerals
OPGSX
—
0.48
71
-27.27
A closed gem with a bias toward China and India.
Vanguard Energy
VGENX
ˇ
-1.51
3
-27.04
A pending manager change gives us pause.
Dodge & Cox International Stock
DODFX
Œ
-9.40
97
-26.66
Great fund, bad stretch. I may buy some more.
Lazard Emerging Markets Equity
LZOEX
•
-2.82
3
-26.57
Contrarians betting on Russia.
Fidelity Select Energy Portfolio
FSENX
—
-2.30
5
-26.23
A little more exploration exposure than Vanguard Energy.
Longleaf Partners
LLPFX
•
-7.27
88
-25.87
Taking shots on many fronts, but good managers remain.
Vanguard Capital Value
VCVLX
ˇ
-9.89
98
-25.42
A long slump has moved us to downgrade the fund.
Parametric Emerging Markets
EAEMX
´
-4.43
23
-25.16
Dials back weighting in China, Korea, and Brazil.
T. Rowe Price New Era
PRNEX
ˇ
-3.23
8
-24.31
New manager shifted to defensive stocks.
FPA Capital
FPPTX
´
-7.11
66
-24.20
Big energy bet has hurt this normally cautious fund.
T. Rowe Price Emerging Markets Stock
PRMSX
´
-5.93
60
-23.95
Growth bias helped in 2015, but less so in January 2016.
Harding Loevner Emerging Markets
HLEMX
•
-5.15
38
-23.34
A little less risk than most emerging-markets funds.
Longleaf Partners International
LLINX
ˇ
-10.93
98
-23.21
We downgraded this fund in July 2015.
Fairholme
FAIRX
•
-11.35
99
-22.87
Financials and Sears have taken a hit.
Eventide Gilead
ETGLX
ˇ
-12.49
97
-22.74
Biotech and small-cap tech are down.
Westport Select Cap
WPSRX
—
-10.99
98
-22.33
United Rentals down 33% in January.
Oppenheimer Developing Markets
ODMAX
•
-5.82
56
-22.32
A closed gem with a bias toward China and India.
Bogle Small Cap Growth
BOGLX
—
-10.35
97
-22.27
Tech and biotech hurt in January 2016.
Data as of 01/31/2016.