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July 2011 Performance Review

August 2, 2011

July marked the third down month in a row for the stock market, with the S&P 500 slipping 2.05% for the month and 4.79% for the last three months. The market is still up just under 4% for the year.

In July, our Conservative portfolio dropped 0.91% while our Aggressive portfolio fell 1.39%. The benchmark Vanguard 500 (VFINX) fund delivered a -2.05% return for the month while Vanguard Total Bond Index (VBMFX) was up 1.58%. Foreign stocks, as measured by the iShares MSCI EAFE Index ETF (EFA), were down 1.97% for the month.

The big news remains the government debt drama, which as of this writing appears to be over, if by over you mean pushing the bulk of the problem ahead a few months. At least government bond holders will get their money. Of course, this was never really in question. As proof look at one of the highest performing fund category last month: long term government bonds, up 4.4%. So basically when there is panic in the air, people flood to treasuries - even when the panic is OVER treasuries.

The best performing stock fund categories last month were precious metals, up 5.50%, Japan, up 4.30%, Asia, up 2.70% and energy, up 1.80%. The worst performing were telecom, down 3.90%, Latin America, down 3.80%, and small growth, down 3.10%.

In portfolio fund action in July:

Our Blend fund Parnassus Equity Income (PRBLX) slipped -0.57% in July, outperforming the S&P 500 by 1.5%. This fund has been lagging over the last year so it’s nice to see a strong relative month.

Royce Financial Services Fund (RYFSX) fell -0.60% in July, also better than the S&P 500 by 1.5%.

Scout International Discovery (UMBDX) dropped -0.78% in July, a negative return but one that was ahead of most other international funds.

Our alternative fund PowerShares DB US Dollar Index (UUP) fell -0.90% in July, ahead of the the S&P 500 by 1.2%.

Jensen Value J (JNVSX) fell -1.08% in July, topping the S&P 500 by 1.0%.

Our alternative fund Satuit Capital Micro Cap (SATMX) fell -1.70% in July, better than the S&P 500 by 0.4%.

Our Long/Short fund PowerShares DB Commodity Double Short (DEE) sank -9.26% in July on sliding commodity prices. This was after a strong performance in June.

Vanguard Telecom Services ETF (VOX) sank -5.70% in July, a rare backward move in what has been a strong year for telecom. In fact, the 1, 3, and 5 year returns for VOX are all well above the S&P 500’s returns.

Vanguard European ETF (VGK) fell -4.60% in July as Europe continues to make America look like a trouble free economy.

Health Care Select SPDR (XLV) fell -3.97% in July. On the bright side, XLV had gained almost 14% this year through the end of June.

Our Small Cap Growth fund Janus Triton T (JATTX) fell -3.93% in July, worse than the S&P 500 by -1.9% as smaller cap stocks in general slid.

 

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