My 401(k) Mutual Funds: Fund Ratings

The time has come for me to share how I rate these funds that I've posted reviews for. All funds are rated from A to D. A, of course, being the top choice and D, well, D isn't really a choice at all.

American Funds Growth RGAFX: B (This fund’s enormous size will surely drag down its performance. The number of holdings is so large you might as well invest in the index fund, which is much cheaper.)

DFA Emerging Markets Value I DFEVX: A (I believe emerging markets will continue posting great returns, which weak dollar will only enhance. This fund is a star among peers – it ranks #1 in 5-year returns which are 45%.)

DFA U.S. Small Cap Value I DFSVX: D (I’m very bearish on small caps in general and this fund’s being overweight in Financials only makes it worse.)

Fidelity Capital & Income FAGIX: A (This is one of the highest performing high-yield bond funds with a high-quality management. It tends to do really well during market rallies so my plan here is to load up on this fund in the first half of 2008 and then ride the upstream wave during the second half of 2008 when I expect market to rebound.)

Fidelity Contrafund FCNTX: B (This is a very well-regarded fun with a great track record, my only concern is that, historically, this fund hasn’t done well in bear markets. It’s also very large, which makes it more difficult to quickly get out from bad positions and get into good ones.)

Fidelity Small Cap Independence FDSCX: D (Middle-of-the-road performance coupled with a relatively new manager and small-cap orientation make this fund a “no-go” for me.)

JPMorgan International Value I JNUSX: C (I like the fact that it’s Foreign, and Large, and Value, but I don’t like its performance at all. It’s too average.)

Morgan Stanley Inst Intl Growth Equity I MNWAX: D (Started in 2005, it’s too new.)

Morgan Stanley Inst Mid Cap Growth I MPEGX: B (I like the quality of management and their stock-picking ability, just a little bit doubtful they can continue their streak in the 2008. A solid fund.)

Oppenheimer International Bond Y OIBYX: A (Started in 2004, this fund is new and I would have immediately disregarded it if not for an OIBAX, which is the same fund with A-type shares, which has a longer history. This fund has blown its peer out of the water in the short- and long-term total returns. I also like the international exposure.)

Third Avenue Real Estate Value TAREX: D (What more is there to say: Real Estate!)

Vanguard Developed Markets Index VDMIX: C (It has minimal exposure to emerging markets and I don’t think “developed markets” will be that hot overall.)

Vanguard Extended Market Index Signal VEMSX: D (Started in 2006, it’s too new.)

Vanguard Inst Total Stock Market Index Inst VITNX: D (Performance is lagging, I don’t see any reason to hold this fund.)

Vanguard Small Cap Index Signal VSISX: D (Started in 2006, it’s too new.)

Vanguard Total Bond Market Index Signal VBTSX: B (Started in 2006, this fund very new, but so far it has done very well).

Western Asset Core Bond Institutional WATFX: B (Very steady growth, quality management, but in this fund lack of volatility also means average returns.)

Western Asset Inflation Indexed Plus Bond WAIIX: B (One of the better performing funds in it’s category. Managed by four managers since the inception.)