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Mark Hulbert
Dec. 9, 2009, 12:13 a.m. EST · Recommend · Post:
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Happy 9-month birthday to bull market
By Mark Hulbert, MarketWatch
ANNANDALE, Va. (MarketWatch) -- It's widely known, of course, that many investors have yet to extend even diplomatic recognition to the bull market that, as of today, is nine months old.
But surprisingly, this skepticism towards the stock market is widely shared even among the advisers with the best long-term records.
Consider those advisers on the Hulbert Financial Digest's monitored list who have beaten a buy-and-hold in the stock market over the last decade on a risk-adjusted basis -- a group that contains no fewer than 71 advisers. Here are the six mutual funds that currently are held in the model portfolios of the greatest number of advisers in this subgroup:
"¢ Vanguard GNMA /quotes/comstock/10r!vfiix (VFIIX 10.86, +0.01, +0.09%) , recommended by 9 advisers
"¢ Vanguard High Yield Corp /quotes/comstock/10r!vwehx (VWEHX 5.40, +0.01, +0.19%) , recommended by 8
"¢ Vanguard Short-Term Inv. Grade /quotes/comstock/10r!vfstx (VFSTX 10.65, +0.02, +0.19%) , recommended by 7
"¢ Fidelity High Income /quotes/comstock/10r!sphix (SPHIX 8.33, +0.01, +0.12%) , recommended by 6
"¢ Fidelity Select Technology /quotes/comstock/10r!fsptx (FSPTX 71.21, -0.49, -0.68%) , recommended by 6
"¢ Vanguard Inflation-Protected /quotes/comstock/10r!vipsx (VIPSX 12.87, -0.01, -0.08%) , recommended by 6
Notice that the three most widely held funds among these top performers are bonds funds, and five of the top six.
Notice, however, that one of the most widely held funds is a stock fund, and a relatively aggressive one at that: Fidelity Select Technology. So the top performers haven't completely sworn off risk altogether.
But, clearly, their risk appetite remains very small.
You might dismiss this list on the theory that it emerged from a list of the market beaters over a 10-year period in which the stock market as a whole went nowhere, and is therefore biased towards very conservative strategies.
But it turns out that a broadly similar list of conservative mutual funds is most popular among the advisers with the best one-year returns. Over the trailing 12 months, there are 98 services on the Hulbert Financial Digest's monitored list that have beaten the 27.1% gain of the Wilshire 5000 Total Market total-return index. Here are the six mutual funds that are held most widely in their model portfolios:
"¢ Vanguard Inflation-Protected /quotes/comstock/10r!vipsx (VIPSX 12.87, -0.01, -0.08%) , recommended by 12 advisers
"¢ Vanguard GNMA /quotes/comstock/10r!vfiix (VFIIX 10.86, +0.01, +0.09%) , recommended by 10
"¢ Vanguard High Yield Corp /quotes/comstock/10r!vwehx (VWEHX 5.40, +0.01, +0.19%) , recommended by 10
"¢ Fidelity High Income /quotes/comstock/10r!sphix (SPHIX 8.33, +0.01, +0.12%) , recommended by 8
"¢ Fidelity New Markets Income /quotes/comstock/10r!fnmix (FNMIX 15.21, -0.02, -0.13%) , recommended by 8
"¢ Vanguard Short-Term Inv. Grade /quotes/comstock/10r!vfstx (VFSTX 10.65, +0.02, +0.19%) , recommended by 8
All in all, a remarkably similar list, though in the case of the one-year market beaters, it is a different kind of risky fund that is in the list of most popular: Fidelity New Markets Income (which invests in government debt in emerging markets) instead of Fidelity Select Technology.
The bottom line? Though the top performers are not outright bearish on the stock market, they are not aggressively bullish either. They most definitely are not throwing caution to the winds.
Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.
- lroger | 9:35 a.m. Today9:35 a.m. Dec. 9, 2009
It was nine months ago that the great 2007-09 bear market came to an end. May it rest in peace.
3 min ago2:43 p.m. Dec. 9, 2009 | Comments: 4
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