Wednesday, February 25, 2009

Lazy Portfolios (5): Realized and Unrealized Gain/Losses of The Individual Funds

Following the recent stock market crash, The stock and international funds suffered heavy losses. Many mutual funds frequently make year-end capital gains distributions. Lat year, many of them distributed the realized losses by the end of the year. You can also sell your funds that suffered heavy losses so you can use the realized losses to offset the realized gains (if any) for tax purpose. This is called "Tax Loss Harvesting". However, many of the funds also have some unrealized losses carried over from last year. How big the unrealized losses could be?

The realized and unrealized capital gain or loss can be found from Vanguard's website under Fund Distribution tab for each of the fund. Here are the results for the individual funds making the Lazy Portfolios.

As of 1/31/09, the US stock funds have realized capital losses of -5% to -115%. The unrealized appreciation/depreciation ranges from -2% to -275%. The worst funds that have huge total realized and unrealized losses are: Vanguard Small Cap Value Index (VISVX): -346.85%, Vanguard Small Cap Growth Index (VISGX): -288.10%, Vanguard REIT Index (VGSIX): -282.84%, Vanguard Value Index (VIVAX): -186.10%. In comparison, the Vanguard 500 Index (VFINX) and the Vanguard Total Stock Mkt Idx (VTSMX) have total losses of -11.15% and -43.80% respectly.

Most of the international funds have total losses ranged from -46% to -69%. The only international fund that carries the worst loss is the Vanguard Pacific Stock Index (VPACX), a huge loss of -315.89%.

These numbers look very scary. How many years will it take for the funds to recover the heavy losses even in good times, let alone in a worst recession of our life time?



























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Tuesday, February 24, 2009

Lazy Portfolios: Weekly Performance Update of The Individual Funds (2/20/09)

Following last week's heavy loss (with the stock funds down an average of -5%), this is the 2nd week that the entire stock market lost grand, with both the US and international stock markets lost an average of another 6% each. The Vanguard Total Stock Mkt Idx (VTSMX) and the Vanguard 500 Index (VFINX) are both down more than 14% YTD. The Vanguard Total Intl Stock Index (VGTSX) is down more than 17% YTD. The biggest loser of the stock funds is the REIT Index (VGSIX), down about 29%, nearly 1/3 of its value, following a -37% return last year.

The bond funds still hold up fine, especially the Vanguard High-Yield Corporate fund (VWEHX) , up > 5% YTD. Although up ~ 1% last week, the Vanguard Long-Term U.S. Treasury (VUSTX) is still the big loser among the bond funds, down -7.5% YTD.

The average YTD returns for both markets are now down -17%, comparable to a whole year return for a bear market, and we are just two months into this year. The questions are: how long this bear market will drag on? Can the lazy portfolios stand another bad bear market year? Both are the questions no one can answer now, only time can tell.


(1) The YTD and Weekly change table of the individual Vanguard funds in the lazy portfolios (2/20/2009). (Note: data from google finance)


















(2) The weekly change of the individual Vanguard funds in the lazy portfolios (2/20/2009)


















(3) The YTD return of the individual Vanguard funds in the lazy portfolios (2/20/2009).


Sunday, February 15, 2009

Lazy Portfolios: Weekly Performance Update of the Individual Funds (2/13/09)

Last week's up momentum has vanished. This week, the individual stock funds in the Lazy portfolios all lost grand, giving up most of the gains from last week. Bond funds kept steady, recovered most of the small losses from last week. The following table shows the performance changes from the last two weeks. (Note: Data from Google finance).






















Results:


(1) The YTD returns of the bond funds in the Lazy Portfolios kept steady last week with little change. The Vanguard High-Yield Corporate fund (VWEHX) is still the best performer, up 6.72% YTD. Last year's best performer, the Vanguard Long-Term U.S. Treasury (VUSTX), is the big loser among the bond funds, down -8.5% YTD.

(2) The US stock funds lost from 5 to 26%. The Vanguard REIT Index (VGSIX) is the worst YTD performer, lost a wopping 26%.

(3) The international funds lost from 3 - 13% YTD. The best performing international fund is still the Vanguard Emerging Mkts Stock Idx(VEIEX), lost only -3.36% YTD, compared with more than 10% lost with all other international funds.


















(4) The US stock funds and the international funds run into deep red this week, lost most of the gains from last week. The US stock funds were down ~ 5.53% for the week, dragged down by the Vanguard REIT Index (VGSIX) which lost more than 11% for the week. The international funds lost an average of 3.93% for the week. The best performer is the Vanguard Interm-Term Treasury fund (VFITX), up 0.73% for the week.
















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Saturday, February 7, 2009

Lazy Portfolios: Weekly Performance Update of the Individual Funds (2/7/2009)

Following the worst January ever, down more than 10% for many of the stock funds, how did we do this week? The following table shows the YTD performance of the individual funds that constitute the eight Lazy Portfolios as of 2/6/09 . (Note: The data were collected from Google Finance.)


Weekly Performance Update of the Individual Funds (2/7/2009)























Results:

(1) The stock and international funds are still down YTD as of 2/6/09, although this week's strong performance has reduced the loss of many stock and international funds.



















(2) The US stock funds performed better this week, up an average of 4.85%.


(3) The international funds did pretty well too, up an average of 4.5%. The Vanguard Emerging Mkts Stock Idx (VEIEX) performed the best for the week, up 7.32%.


(4) The bond funds lagged behind this week with many posted negative returns. The two bond funds that posted positive returns are: the Vanguard Inflation-Protected Secs (VIPSX) and the Vanguard High-Yield Corporate (VWEHX). The Vanguard High-Yield Corporate fund is also the best performer YTD, up 6.54%.
























Related Posts:

Lazy Portfolios (4) Detailed Analysis of the Individual Funds
Lazy Portfolios: 2009 YTD Performance Update
Lazy Portfolios (3): Surprise, Surprise, the total bond portfolio beats them all
Lazy Portfolios (2): Risk Analysis
Lazy Portfolios (1): A 10 year Performance Comparison
Which is better? An Index Fund Portfolio or An Actively Managed Fund Portfolio?


Sunday, February 1, 2009

Lazy Portfolios (4): Detailed Analysis of the Individual Funds

The eight famous Lazy Fortfolios consist of a mix of 3-11 funds from 21 individual Vanguard funds. Seven of them are bond funds, eight are stock funds including a speciality real estate fund, and six are international funds. The funds in each group are listed below:

Bond Funds:

Vanguard Short-Term Investment-Grade (VFSTX)
Vanguard Short-Term Treasury (VFISX)
Vanguard Interm-Term Treasury (VFITX)
Vanguard Long-Term U.S. Treasury (VUSTX)
Vanguard Total Bond Market Index (VBMFX)
Vanguard Inflation-Protected Secs (VIPSX)
Vanguard High-Yield Corporate (VWEHX)

Stock Funds:

Vanguard Small Cap Index (NAESX)
Vanguard Small Cap Value Index (VISVX)
Vanguard Small Cap Growth Index (VISGX)
Vanguard Extended Market Idx (VEXMX)
Vanguard Value Index (VIVAX)
Vanguard 500 Index (VFINX)
Vanguard Total Stock Mkt Idx (VTSMX)
Vanguard REIT Index (VGSIX)

International Funds:

Vanguard Emerging Mkts Stock Idx (VEIEX)
Vanguard Pacific Stock Index (VPACX)
Vanguard Developed Markets Index (VDMIX)
Vanguard European Stock Index (VEURX)
Vanguard International Value (VTRIX)
Vanguard Total Intl Stock Index (VGTSX)


Results:


The following table shows the YTD return (1/30/09) of these individual funds. (Note: data from finance.google.com)

(1) The bond funds performed better as a group, except the Vanguard Long-Term U.S. Treasury (VUSTX) fund which returned -8.49%, similar to the Vanguard Total Stock Mkt Idx (VTSMX) .















(2) The stock and international funds all performed not well for the first month of the year, returned an average of -10% YTD.















(3) The risk of the fund is normally reflected by the STD (standard deviation) of the fund. The larger the STD, the risker the fund. When compared the one year STD of the funds to the one year returns, the bond funds (with an average STD of 9.98) returned an average of -0.29%.






















(4) The stock funds with a average STD of 27.11, returned an average of -38.97% last year. However, the REIT index lost -47.82%.

(5) Although the average STD (28.91) of the international funds was similar to that of the stock funds, the international funds performed worst (with an average return of -45.26% last year). Again proved the common notion that the international funds were generally more risky.






















Conclusion:

Although the returns of the assets in a group are generally variable, the differences of the returns among the different investment classes (bonds, stocks, international stocks) are generally greater. The asset allocation among these investment classes would be a bigger factor to determine the final return of a portfolio.





Related Posts:

Lazy Portfolios: 2009 YTD Performance Update
Lazy Portfolios (1): A 10 year Performance Comparison
Lazy Portfolios (2): Risk Analysis
Lazy Portfolios (3): Surprise, Surprise, the total bond portfolio beats them all
Which is better? An Index Fund Portfolio or An Actively Managed Fund Portfolio?