Tracking The Money 70

Photo by negahdron, Courtesy of flickr

The Money 70 is the magazine’s “recommended list of mutual funds and exchange-traded funds.” The list breaks the funds into the following categories: Large-Cap, Midcap, Multicap, Small-Cap, Specialty, Foreign, Bond and Target-Retirement.

The list tracks the performance of the seventy recommended funds over periods of one month, one year and three years (this figure is annualized). I noticed that most of the funds were in negative territory for all three of these periods. Definitely not a good look!

For a good look, I decided to search for funds that had positive returns in all three periods. There were four funds that made the cut and they all came from the same category: Bond.

Since Money is a print publication, the stats included in the March magazine were compiled as of January 21, 2009. I wanted to see how the funds have performed since the 1/21/09 cut-off date, so click the tickers to view a chart of each fund versus the S&P 500.

FPA New Income (Ticker: FPNIX), Vanguard Intermediate Term Tax-Exempt (Ticker: VWITX), Vanguard Short-Term Bond (Ticker: VBISX), and Vanguard Total Bond Market (VBMFX).

I compared each fund to the S&P 500 just to display how these bond funds performed relative to the stock market. Obviously, there is lower volatility and the losses are much smaller.

However, to properly evaluate any investment you should use an appropriate benchmark. Morningstar can provide you with the fund’s performance relative to competitors within its category and the appropriate benchmark or index.

I wanted to see how these funds have held up since the January 21 cut-off in the magazine. View the Morningstar Snapshot for each fund: FPNIX, VWITX, VBISX and VBMFX. Not bad at all!

Before you jump into mutual funds or ETFs be sure to do your research. They too bear risk and can also have high expenses and/or sales charges. A front-end load, back-end load or contingent deferred sales charge (CDSC)will eat away at your returns. For example, one of the four funds (FPNIX) has a 3.5 percent sales load.

I will keep an eye on these four and the Money 70 for you ;)