NEW YORK (
) -- Within the broad arsenal of
Nasdaq Powers Past Record High Amid Bond Market Lull; Tesla Extends Gains
With investors content to buy into Fed Chairman Jerome Powell's inflation optimism, bond markets are holding steady and stocks are looking to test fresh record highs.
products, one successful fund has truly set the stage for growth in the 2009 market environment. The
Vanguard Capital Value Fund
is the firm's top product with a year-to-date growth rate of 54.40%. VCVLX's closest competition includes the
Emerging Markets Stock Index
Precious Metals and Mining
with respective year-to-date growth rates of 51.21% and 48.21%.
According to its product summary, VCVLX seeks maximum long-term total return by investing in "stocks across the capitalization spectrum considered by the fund's advisor (
Wellington Management Company
) to be undervalued." This mutual fund holds 75 individual stocks with total net assets of $489.9 million as of June 30.
By sector, VCVLX's portfolio composition is heavily weighted in financials and energy with 24.10% and 19%, respectively. Other notable weightings include industrials (18%), health care (14.20%), consumer discretionary (5.40%) and utilities (7.70%).
Curiously, these sector weightings have shifted dramatically over the past few years; since June 2008, the health care sector has sharply dropped out of VCVLX's portfolio (declining from 18.30% of holdings to a current 14.20%). Generally speaking, consumer discretionary, consumer staples, health care and information technology lost relative weight in the fund while energy, financials, industrials, materials, telecomm and utilities sectors gained prominence. Most notably, VCVLX's holdings in information technology dropped 9.20% since June 2008.
In terms of company-specific holdings, VCVLX's top holdings follow the model set forth by its sector distribution, particularly seen through the financial sector. In addition, the fund's top holdings reflect some emphasis on pharmaceuticals and airlines (contributing to health care and industrials, respectively).
As of June 30, VCVLX's largest individual holding is tied to banking behemoth
Bank of America
closely following. Other top 10 holdings include
Delta Air Lines
OAO Gazprom-Sponsored ADR
Hartford Financial Services
As of Aug. 6, VCVLX has an SEC yield of 0.49%. Although the fund's trading value has fluctuated over a 52-week period (VCVLX hit a high point of $8.32 in mid-August 2008 and bottomed out in late November of 2008 with a price of $3.73), such turbulence is hardly unexpected given the severity of the stock crash last year. Furthermore, VCVLX is categorized as a 4/5 Risk Level within Vanguard's financial database, so volatility to some degree is expected. In terms of asset class, VCVLX is traded as an aggressive domestic stock fund and maintains an expense ratio of 0.52%.
-- Written by Don Dion in Williamstown, Mass.
At the time of publication, Dion did not own any of the funds mentioned.
Don Dion is president and founder of
, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.
Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.