Wondering if foreign stock funds will come back over time as strongly as U.S. funds or whether they will lag for some time.
While no one has a crystal ball, I am thinking of selling my VMNVX global low volativity fund and moving the money to my U.S vanguard funds like VEIRX and VDIGX instead.
Yes, VMNVX is about half U.S. domestic stock, mostly midcap, but midcaps don't seem to be doing that great either.
It seems we have been hearing forever that foreign stocks are the future but year after year that doesn't seem to be panning out. Maybe Bogle was right when he said just stay American.
Any advice and counsel here?
I sold vmnvx and moved to fcntx and vwelx for now. vmnvx went down lot more and i wrongly thought low volatility means it should go down less.
I have no clue which one will go up more in recovery. May be some experienced folks will weigh in.
but all funds i had to protect my downside fpacx, oakbx, vmnvx, sgenx failed rather miserably. I did not get the upside with them but i got all the downside.
I also have the fund and have been quite disappointed with it's performance during this correction, bear, or whatever you want to call it. It is doing even worse than my SP500 Index. The fund is not that old and had never been tested in a down market. Well now it has and I don't like what I see.
Since it is down the highest % of any of my funds, I don't plan to exchange out until I am at least *close* to back to even on it.
As you state, it is 50/50 US/foreign. I have been skeptical of foreign for some time, and skeptical of the claim that foreign is "overdue to outperform." Though those stocks may be relatively undervalued and foreign has lagged for years, I see nothing going on in those countries, especially Europe (changing demographics, central banks, EU nonsense), to convince me they will shine again. That said, on a lark I bought some VMVFX, seeing it as a diversified and eclectic fund giving me a little bit of foreign as well as small/mid which I was otherwise lacking in my port. Lesson learned.
Many thanks bigsteve and waffle! Your posts generally mirror my thinking and the reason for the OP.
Does someone have an opposite view or counter argument?
I like the fund, but think older investors should stick with large cap US stocks. they do international business. Holding VFIAX and VDIGX on the market rebound would be a good plan. Then add some mid cap growth funds after there is some market turnaround.
So if i understood correctly,
main reason vmnvx fell so much was because mid/small stocks were hit harder than large cap.
And we do not know which ones of the mid/small will come out successfully out of this downturn so it is better to wait till recovery is underway.
I remember 4 or more out of top 10 holdings in dodge cox funds did not survive 2008/2009 downturn.
This time it will be probably small/mid and high debt companies that will be hit hard.
I will give it some more time. As a global fund, it has done between VFINX/SP500 and international VGTSX. In the recent selloff, it did fall almost as much as SP500 but less than international. There is also added complication from currency hedging - that adds to performance when dollar is strong. People have been saying that dollar would/should weaken, but it hasn't really so far - the US seems to be the best house in the bad global neighborhood - so far.