How’d I Do? 2012 Performance of My Top Mutual Funds and ETFs

In the November issue of Investment Advisor, I wrote about a process I've developed over the past five years to select and monitor mutual funds and ETFs. It's called the Fiduciary Scorecard and like any tool of this sort, the proof is in the pudding. Therefore, I thought I'd look at a few of the funds I selected in January 2012 and examine how they performed for the entire year. I should clarify a few things before we proceed. First, the scorecard measures a fund in relation to its specific peer group. Hence, it's possible that a fund may have performed poorly, but relative to its peers, received a high score. Therefore, category selection becomes an important step. 

Overall, I'm pleased with the results. In fact, 70% of all funds finished in the top half of their category. I'll divide the performance according to Morningstar's percentile rank where 1 is the best and 100 is the worst. We'll concentrate on the funds that finished in the top half of their peer group.

Percentile 1-10

Fund

TICKER

Category

Percentile Rank

SIT US Government Securities

SNGVX

Short Government

4th

PIMCO All Asset All Authority

PAUIX

World Allocation

5th

Metropolitan West Total Return Fund

MWTIX

Intermediate Term Bond

6th

Marketfield

MFLDX

Long-Short

6th

 

Percentile 11-20

Fund

TICKER

Category

Percentile Rank

PIMCO All Asset

PAAIX

World Allocation

11th

PIMCO Total Return

PTTRX

Intermediate-Term Bond

12th

PIMCO Short Term Bond

PTSHX

Ultra Short Bond

12th

Merger

MERFX

Market Neutral

19th

  

Percentile 21-30

Fund

TICKER

Category

Percentile Rank

Fidelity Advisor Emerging Markets

FMKIX

Emerging Market Bond

21st

Metropolitan West Intermediate Bond

MWIIX

Intermediate-Term Bond

21st

Nuveen Real Estate

FARCX

Real Estate

22nd

PIMCO Global Bond (USD Hedged)

PGBIX

World Bond

24th

Vanguard's Inflation Protected Securities

VIPSX

Inflation-Protected Bond

28th

 

Percentile 31-40

Fund

TICKER

Category

Percentile Rank

Franklin Templeton Hard Currency

ICHHX

Currency

31st

PIMCO Unconstrained Bond

PFIUX

Nontraditional Bond

32nd

PIMCO GNMA

PDMIX

Intermediate Government

34th

Virtus Emerging Market Opportunities

HIEMX

Diversified Emerging Markets

35th

Vanguard Short Term Federal

VSGBX

Short Government

35th

NOTE: Virtus Emerging Market Opportunities also won Morningstar's Manager of the year in the Emerging Market Stock category.

 

Percentile 41-50

Fund

TICKER

Category

Percentile Rank

Weitz Short-Intermediate Term

WEFIX

Short-Term Bond

41st

Arbitrage

ARBNX

Market Neutral

48th

Royce Special Equity Invmt

RYSEX

Small Blend

50th

Ridgeworth US Gov Sec Ultra-Short Bond

SIGVX

Ultrashort Bond

50th

Ridgeworth Seix Floating Rate High Inc

SAMBX

Bank Loan

50th

 

Summing Up

As mentioned earlier, the Fiduciary Score and the percentile rank only indicate how a fund performed relative to its peer group. This does not imply that the funds with the highest Fiduciary Score will provide the best returns. A good example of this is the Arbitrage fund which had a total return of 0.44% in 2012. Clearly not a good return, but it did rank in the top half of its peer group. Conversely, a fund may also have a low score and provide a good absolute return. 

In the quest of selecting good funds, I realize there is no crystal ball. However, the aforementioned Fiduciary Scorecard has provided me with a fast, efficient and fairly good selection tool. Going forward, I will be looking for ways to improve it on the margins. I'll keep you posted. 

Thanks for reading and have a great week!

For more on Mike Patton's Fiduciary Scorecard tool, view his November 2012 feature story in Investment Advisor; his January 2012 blog on the subject, and the sidebar to a 2009 article on how the Scorecard was developed.

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