Powerfund Portfolios Performance Review

Powerfund Portfolios Commentary

August 2015 Performance Review

September 2, 2015
Category: 
Powerfund Portfolios

The Powerfund Portfolios are both ahead of the S&P so far in 2015 — down less than 1% in the Aggressive portfolio and less than 2% in the Moderate. ...read the rest of this article»

Stock Funds1mo %
Vanguard Telecom Services ETF (VOX)-3.13%
Wasatch Long/Short (FMLSX)-4.27%
Wasatch Frontier Emerg Sm Count (WAFMX)-4.75%
PowerShares DB Crude Oil Dble Short (DTO)-5.02%
Satuit Capital Micro Cap (SATMX)-5.81%
PRIMECAP Odyssey Growth (POGRX)-5.83%
[Benchmark] Vanguard 500 Index (VFINX)-6.04%
Vanguard MegaCap Growth (MGK)-6.53%
Artisan Global Equity (ARTHX)-7.01%
Vanguard European ETF (VGK)-7.02%
Vanguard Europe Pacific ETF (VEA)-7.23%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)-7.28%
Gold Short (DZZ)-7.42%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)-9.32%
iShares MSCI BRIC Index (BKF)-10.33%
Bond Funds1mo %
Vanguard Mortgage-Backed Securities (VMBS)-0.13%
SPDR Barclays Intl. Treasury (BWX)-0.19%
[Benchmark] Vanguard Total Bond Index (VBMFX)-0.36%
Vanguard Extended Duration Treasury (EDV)-0.79%
Vanguard Long-Term Bond Index ETF (BLV)-1.11%

July 2015 Performance Review

August 4, 2015
Category: 
Powerfund Portfolios

With interest rates heading back down and a global commodity slide intensifying, the Powerfund Portfolios are back to doing well relative to benchmarks. Our Aggressive portfolio matched the performance of the S&P 500 in July, even with the Aggressive port's 40% (roughly) bond allocation.  ...read the rest of this article»

Stock Funds1mo %
PowerShares DB Crude Oil Dble Short (DTO)43.06%
Gold Short (DZZ)13.61%
Vanguard European ETF (VGK)4.37%
Vanguard MegaCap Growth (MGK)3.50%
Vanguard Europe Pacific ETF (VEA)2.79%
PRIMECAP Odyssey Growth (POGRX)2.17%
[Benchmark] Vanguard 500 Index (VFINX)2.08%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)1.25%
Artisan Global Equity (ARTHX)0.62%
Vanguard Telecom Services ETF (VOX)-0.60%
Wasatch Frontier Emerg Sm Count (WAFMX)-1.01%
Wasatch Long/Short (FMLSX)-3.55%
Satuit Capital Micro Cap (SATMX)-4.08%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)-6.81%
iShares MSCI BRIC Index (BKF)-7.77%
Bond Funds1mo %
Vanguard Extended Duration Treasury (EDV)7.04%
Vanguard Long-Term Bond Index ETF (BLV)3.07%
Vanguard Mortgage-Backed Securities (VMBS)0.80%
[Benchmark] Vanguard Total Bond Index (VBMFX)0.76%
SPDR Barclays Intl. Treasury (BWX)-0.21%

June 2015 Performance Review

July 2, 2015
Category: 
Powerfund Portfolios

Not our best showing last month, but with the recent slide in stocks joining the weakness in bonds, our Aggressive portfolio (up 1.45% YTD) is now just ahead of the S&P 500 (1.17% YTD) with dividends for the first half of 2015. The bond-heavier Conservative portfolio dipped more for the month and year-to-date than the Aggressive as bonds have underperformed so far in 2015. Considering Vanguard Long-Term Investment-Grade (VWESX) is down 4.8% for the year, we're classifying the Conservative portfolios -0.87% YTD showing as 'hanging in there'.

Our Conservative portfolio was down 2.18% for the month. The Aggressive portfolio dropped 1.57%. Benchmark Vanguard funds for June 2015: Vanguard 500 Index Fund (VFINX) down 1.93%; Vanguard Total Bond Market Index Fund (VBMFX) off 1.02%; Vanguard Developed Markets Index Fund (VTMGX) down 2.79%; Vanguard Emerging Markets Stock Index (VEIEX) down 2.39%; Vanguard Star Fund (VGSTX), a total global balanced portfolio, fell 1.69%.

Small-cap growth was really the only area of positive returns in June (it's also is sporting some of the best year-to-date numbers at just over 7%).

U.S. sector funds were almost all down last quarter except for financials and healthcare, the latter being responsible for barely positive S&P 500 numbers YTD. Take Healthcare out and the S&P 500 would be in negative territory in 2015.

Most countries are having a good year rebounding from previous declines. The strongest markets are Japan and China.

But interest rates is where the hub-bub is. We don't expect the great rate increase to continue much longer — there is just too much money that says it will. Moreover, Greece is once again causing some alarm to investors, which could put more pressure on emerging market bonds and higher risk debt in general, both foreign and domestic.

There are many possible scenarios investors should consider when setting up their portfolios for the (supposedly) inevitable rate rise because rates might go up and they might not. There is no rational reason to believe that rates will rise to levels of the past. There is no inalienable rule of the universe that says investors in bonds (or stocks) have to earn a positive real return — there could be 1% yields and 2% inflation for years to come.

Just for fun, here's a list of possible scenarios that are as likely as the expected big run-up in rates that could burn most bond investors in ways they are not expecting to get burned:

  • Flat to inverted yield curve
  • Spread widens between Government and higher risk debt from a panic somewhere
  • Even lower yields! Why is a 5% treasury bond more likely than a 1.5% ten year treasury?
  • Higher inflation and negative real rates for all investment grade bonds below 10 duration
  • Negative fee-adjusted yields for most bond funds
  • Falling U.S. dollar with rising credit spreads in U.S. slowdown
  • Rising euro if sketchy Greece gets a brand new second hand currency
Stock Funds1mo %
PowerShares DB Crude Oil Dble Short (DTO)4.03%
Gold Short (DZZ)2.93%
Satuit Capital Micro Cap (SATMX)2.20%
Wasatch Frontier Emerg Sm Count (WAFMX)0.34%
PRIMECAP Odyssey Growth (POGRX)-0.33%
Vanguard Telecom Services ETF (VOX)-1.19%
Artisan Global Equity (ARTHX)-1.62%
Vanguard MegaCap Growth (MGK)-1.71%
[Benchmark] Vanguard 500 Index (VFINX)-1.93%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)-2.39%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)-2.79%
iShares MSCI BRIC Index (BKF)-3.76%
Wasatch Long/Short (FMLSX)-4.08%
Vanguard Europe Pacific ETF (VEA)-4.11%
Vanguard European ETF (VGK)-4.76%
Bond Funds1mo %
Vanguard Mortgage-Backed Securities (VMBS)-0.72%
SPDR Barclays Intl. Treasury (BWX)-0.74%
[Benchmark] Vanguard Total Bond Index (VBMFX)-1.02%
Vanguard Long-Term Bond Index ETF (BLV)-3.42%
Vanguard Extended Duration Treasury (EDV)-6.07%

May 2015 Performance Review

June 5, 2015
Category: 
Powerfund Portfolios

It wasn't our best month, that's for sure. With the S&P 500 rising just over 1% in May, we lost a fraction of a percent in both Powerfund portfolios, thanks mostly to bond underperformance, along with a weak foreign stock chaser. ...read the rest of this article»

Stock Funds1mo %
PRIMECAP Odyssey Growth (POGRX)2.55%
Artisan Global Equity (ARTHX)2.41%
Satuit Capital Micro Cap (SATMX)2.19%
Vanguard MegaCap Growth (MGK)1.55%
PowerShares DB Crude Oil Dble Short (DTO)1.44%
[Benchmark] Vanguard 500 Index (VFINX)1.27%
Vanguard European ETF (VGK)0.28%
Vanguard Europe Pacific ETF (VEA)-0.05%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)-0.15%
Gold Short (DZZ)-1.22%
Vanguard Telecom Services ETF (VOX)-1.83%
Wasatch Frontier Emerg Sm Count (WAFMX)-1.98%
Wasatch Long/Short (FMLSX)-2.46%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)-3.38%
iShares MSCI BRIC Index (BKF)-4.35%
Bond Funds1mo %
Vanguard Mortgage-Backed Securities (VMBS)-0.23%
[Benchmark] Vanguard Total Bond Index (VBMFX)-0.45%
Vanguard Long-Term Bond Index ETF (BLV)-2.38%
SPDR Barclays Intl. Treasury (BWX)-3.23%
Vanguard Extended Duration Treasury (EDV)-3.64%

April 2015 Performance Review

May 7, 2015
Category: 
Powerfund Portfolios

On March 18, our Aggressive portfolio crossed the 300% mark since inception (3/31/2002). Recent weakness in the markets held us under this meaningless but psychologically cool level. It took us just shy of 13 years. That's an annualized return of about 11.25%. No other so-called fund-of-funds (portfolios of other funds) in Morningstar's massive fund database started before 2004 have as high an annualized return.

You'd never guess this portfolio's winning ways from April's relatively crummy performance, but through the long and wild swings in the market, we've been beating the S&P 500. (The Vanguard 500 Index fund was up "just" 135% with dividends during this same stretch.) We'll have more to say on this in coming weeks, but the big focus here is not the 300% of the past, but where the next 300% is going to come from.

For more on our performance calculations, please go here.

Our Conservative portfolio was up 0.49% in April. Our Aggressive portfolio fell 0.48%. Benchmark Vanguard funds for April 2015: Vanguard 500 Index Fund (VFINX) up 0.95%; Vanguard Total Bond Market Index Fund (VBMFX) down 0.36%; Vanguard Developed Markets Index Fund (VTMGX) up 4.07%; Vanguard Emerging Markets Stock Index (VEIEX) up 7.79%; Vanguard Star Fund (VGSTX), a total global balanced portfolio, gained 0.83%.

We had a month of wide dispersion. Our top fund, BKF, was up 11.37% on a great month in general for emerging markets (after years of relative disappointment). Oil rebounded sharply, sending our remaining oil short PowerShares DB Crude Oil Dble Short (DTO) down 43.76%. Of course, we sold 60% of the shares at $111.15 on March 13, a stone's throw from the year's high of $123.81 on this volatile leveraged fund, so the damage was minimized.

Most of our stock funds actually beat the S&P 500 in April, but longer-term bond funds were hit hard, dragging down our portfolios. The exception to the bond slide is our newly added SPDR Barclays Intl. Treasury (BWX), which trades more on currency exchange rates than interest rates and was up almost 2% on a recently strong U.S. dollar. PRIMECAP Odyssey Growth (POGRX) posted a weak month, with a 1.3% slide. This now popular and famous fund is on our watch list to sell.

Stock Funds1mo %
iShares MSCI BRIC Index (BKF)11.37%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)7.79%
Vanguard European ETF (VGK)4.84%
Vanguard Europe Pacific ETF (VEA)4.34%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)4.07%
Vanguard Telecom Services ETF (VOX)3.69%
Wasatch Long/Short (FMLSX)2.80%
Artisan Global Equity (ARTHX)2.40%
Wasatch Frontier Emerg Sm Count (WAFMX)2.37%
[Benchmark] Vanguard 500 Index (VFINX)0.95%
Vanguard MegaCap Growth (MGK)0.10%
Gold Short (DZZ)0.01%
PRIMECAP Odyssey Growth (POGRX)-1.30%
Satuit Capital Micro Cap (SATMX)-2.57%
PowerShares DB Crude Oil Dble Short (DTO)-43.76%
Bond Funds1mo %
SPDR Barclays Intl. Treasury (BWX)1.96%
Vanguard Mortgage-Backed Securities (VMBS)0.15%
[Benchmark] Vanguard Total Bond Index (VBMFX)-0.36%
Vanguard Long-Term Bond Index ETF (BLV)-2.47%
Vanguard Extended Duration Treasury (EDV)-5.62%

March 2015 Performance Review

April 2, 2015
Category: 
Powerfund Portfolios

March was a pretty lousy month for stocks globally. The 2015 market is turning out to be a little topsy-turvy, with quick rebounds and drops. Our Conservativeportfolio moved more or less with the markets, while our more uniquely positioned Aggressive portfolio bucked the benchmarks with a nice gain, giving us a decent spread of about 4% over the S&P 500 thus far in 2015. ...read the rest of this article»

Stock Funds1mo %
PowerShares DB Crude Oil Dble Short (DTO)13.61%
Gold Short (DZZ)4.69%
Satuit Capital Micro Cap (SATMX)1.85%
Artisan Global Equity (ARTHX)-0.12%
PRIMECAP Odyssey Growth (POGRX)-0.18%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)-1.26%
[Benchmark] Vanguard 500 Index (VFINX)-1.59%
Vanguard Europe Pacific ETF (VEA)-1.65%
Vanguard MegaCap Growth (MGK)-1.84%
iShares MSCI BRIC Index (BKF)-1.99%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)-2.08%
Wasatch Long/Short (FMLSX)-2.14%
Vanguard Telecom Services ETF (VOX)-2.44%
Wasatch Frontier Emerg Sm Count (WAFMX)-2.95%
Vanguard European ETF (VGK)-2.99%
Bond Funds1mo %
Vanguard Extended Duration Treasury (EDV)1.45%
Vanguard Long-Term Bond Index ETF (BLV)0.66%
Vanguard Mortgage-Backed Securities (VMBS)0.49%
[Benchmark] Vanguard Total Bond Index (VBMFX)0.41%
SPDR Barclays Intl. Treasury (BWX)n/a

February 2015 Performance Review

March 2, 2015
Category: 
Powerfund Portfolios

What the interest rate gods giveth in January, they taketh away in February. The S&P rebounded to new highs, and we're even breaking through Nasdaq 5,000 again—just like we did in March, 2000! The reality of fabulous tech earnings growth finally caught up with NASDAQ prices of 15 years ago.  ...read the rest of this article»

Stock Funds1mo %
Gold Short (DZZ)11.78%
Vanguard Telecom Services ETF (VOX)6.62%
Vanguard MegaCap Growth (MGK)6.27%
Vanguard Europe Pacific ETF (VEA)6.16%
Vanguard European ETF (VGK)6.09%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)5.94%
PRIMECAP Odyssey Growth (POGRX)5.79%
[Benchmark] Vanguard 500 Index (VFINX)5.73%
iShares MSCI BRIC Index (BKF)5.71%
Satuit Capital Micro Cap (SATMX)5.53%
Artisan Global Equity (ARTHX)5.05%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)3.53%
Wasatch Long/Short (FMLSX)2.89%
Wasatch Frontier Emerg Sm Count (WAFMX)0.66%
American Century Utility Income (BULIX)-2.88%
PowerShares DB Crude Oil Dble Short (DTO)-3.60%
Bond Funds1mo %
DoubleLine Floating Rate N (DLFRX)1.17%
Vanguard Mortgage-Backed Securities (VMBS)-0.33%
[Benchmark] Vanguard Total Bond Index (VBMFX)-1.08%
Vanguard Long-Term Bond Index ETF (BLV)-4.16%
Vanguard Extended Duration Treasury (EDV)-9.12%

January 2015 Performance Review

February 3, 2015
Category: 
Powerfund Portfolios

So far, so good. 2015 is off to a nice start. At least for us. The S&P 500 was down 3% while both of our portfolios were up just over 2%. That's a 5% performance gap, and it's only been four weeks. ...read the rest of this article»

Stock Funds1mo %
PowerShares DB Crude Oil Dble Short (DTO)25.88%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)0.90%
Vanguard Europe Pacific ETF (VEA)0.71%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)0.67%
iShares MSCI BRIC Index (BKF)0.57%
Vanguard European ETF (VGK)0.52%
Artisan Global Equity (ARTHX)0.25%
American Century Utility Income (BULIX)-0.11%
Vanguard MegaCap Growth (MGK)-1.42%
Vanguard Telecom Services ETF (VOX)-1.90%
PRIMECAP Odyssey Growth (POGRX)-1.96%
Wasatch Frontier Emerg Sm Count (WAFMX)-2.26%
Wasatch Long/Short (FMLSX)-2.35%
[Benchmark] Vanguard 500 Index (VFINX)-3.01%
Satuit Capital Micro Cap (SATMX)-3.58%
Gold Short (DZZ)-16.93%
Bond Funds1mo %
Vanguard Extended Duration Treasury (EDV)14.25%
Vanguard Long-Term Bond Index ETF (BLV)6.56%
[Benchmark] Vanguard Total Bond Index (VBMFX)2.31%
Vanguard Mortgage-Backed Securities (VMBS)0.89%
DoubleLine Floating Rate N (DLFRX)0.62%

December 2014 Performance Review

January 7, 2015
Category: 
Powerfund Portfolios

Another year is in the can, and what a year it was. On the surface, 2014 was a great one: the economy ended on a high note and the U.S. stock market shook off a late-year slide to post a 13.51% 12-month return. This on top of the bond market's near 6% gain (and 2014 was supposed to be the year of the great bond collapse). How could an investor perform poorly in such an environment? All too easily, it turns out. ...read the rest of this article»

Stock Funds1mo %
PowerShares DB Crude Oil Dble Short (DTO)39.80%
Satuit Capital Micro Cap (SATMX)4.39%
American Century Utility Income (BULIX)1.54%
Wasatch Long/Short (FMLSX)-0.11%
[Benchmark] Vanguard 500 Index (VFINX)-0.27%
Wasatch Frontier Emerg Sm Count (WAFMX)-0.86%
Vanguard MegaCap Growth (MGK)-1.06%
PRIMECAP Odyssey Growth (POGRX)-1.23%
Artisan Global Equity (ARTHX)-2.41%
Gold Short (DZZ)-3.20%
Vanguard Telecom Services ETF (VOX)-3.30%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)-3.73%
Vanguard Europe Pacific ETF (VEA)-3.77%
Vanguard European ETF (VGK)-4.69%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)-4.97%
iShares MSCI BRIC Index (BKF)-5.27%
Bond Funds1mo %
Vanguard Extended Duration Treasury (EDV)5.33%
Vanguard Long-Term Bond Index ETF (BLV)2.13%
[Benchmark] Vanguard Total Bond Index (VBMFX)0.09%
Vanguard Mortgage-Backed Securities (VMBS)0.08%
DoubleLine Floating Rate N (DLFRX)-0.56%

November 2014 Performance Review

December 3, 2014
Category: 
Powerfund Portfolios

The U.S. stock market, fueled at least partially by (what now seems like) permanently low interest rates and a lack of investment opportunity abroad, is on to new highs again. The strange thing is that oil is plunging, non-U.S. economies are weak, and recent Black Friday sales were lackluster. You'd almost think we were in another global recession.  ...read the rest of this article»

Stock Funds1mo %
PowerShares DB Crude Oil Dble Short (DTO)33.19%
PRIMECAP Odyssey Growth (POGRX)4.17%
Vanguard MegaCap Growth (MGK)3.09%
[Benchmark] Vanguard 500 Index (VFINX)2.68%
Vanguard European ETF (VGK)2.07%
Artisan Global Equity (ARTHX)1.23%
Gold Short (DZZ)1.17%
Vanguard Telecom Services ETF (VOX)0.88%
American Century Utility Income (BULIX)0.70%
[Benchmark] Vanguard Tax-Managed Intl Adm (VTMGX)0.08%
Vanguard Europe Pacific ETF (VEA)0.00%
[Benchmark] Vanguard Emerging Mkts Stock Idx (VEIEX)-1.00%
iShares MSCI BRIC Index (BKF)-1.31%
Satuit Capital Micro Cap (SATMX)-1.33%
Wasatch Long/Short (FMLSX)-1.67%
Wasatch Frontier Emerg Sm Count (WAFMX)-2.15%
Bond Funds1mo %
Vanguard Extended Duration Treasury (EDV)4.34%
Vanguard Long-Term Bond Index ETF (BLV)1.70%
Vanguard Mortgage-Backed Securities (VMBS)0.72%
[Benchmark] Vanguard Total Bond Index (VBMFX)0.65%
DoubleLine Floating Rate N (DLFRX)0.43%
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