A few months ago, I walked you through the domestic-stock funds and bond funds in Morningstar’s 401(k)
A few months ago, I walked you through the domestic-stock funds and bond funds in Morningstar’s 401(k), and now it’s time for the foreign-stock fund lineup. We have five foreign-stock funds: three to cover the bases in the foreign-stock style box and two to cover emerging markets. While the three diversified foreign funds work nicely in concert together or in pairs, the emerging-markets funds are intended as an either-or choice.
In choosing our funds, we look for great management, a sound strategy, and low costs. You can’t make quick changes to 401(k) funds for a number of logistical reasons, so that leads us to place extra emphasis on stable management. Let’s take a look.
Dodge & Cox International Stock (NASDAQ:DODFX – News) provides great management at a reasonable price. Dodge & Cox has long been successful investing in the United States, and it has been able to translate that success overseas since launching this fund in 2001. [Read the full article]
Pick Your PoisonThere’s no doubt that you can pick up a bit of extra yield by venturing beyond cash: As of Friday, Vanguard’s various taxable money market funds were yielding just 0.01%, whereas the firm’s short-term bond funds all yielded anywhere from 0.74% ( Short-Term Treasury (NASDAQ:VFISX – News)) to 2.35% ( Short-Term Investment-Grade (NASDAQ:VFSTX – News)).
But in scoring a higher payout, you’re also subjecting your portfolio to fluctuations in your principal. And if you’re venturing into a bond fund that has an appreciably higher yield than what you’re able to obtain with your cash, you can rest assured that it’s taking on a meaningful degree of interest-rate or credit risk to deliver it.
Ultrashort-bond funds, which many investors gravitated to as a cash alternative about five years ago, provide a stark case in point. In an effort to goose their yields, many of those funds had invested heavily in subprime debt and asset-backed commercial paper. [Read the full article]
Publicly traded for-profit education companies have seen rapid growth recently. This has helped them take market share away from traditional schools. While we expect growth to eventually slow, we still think the long term secular trends are promising for the for-profit sector.
Between 2005 and 2009, the average student populations of the 12 education companies we cover expanded by 352,000 students. This represents almost 23% of the 1.55 million student population growth estimated by the Department of Education (DoE) for that period. While this growth was impressive, recent trends have been even more substantial. The weak economy has encouraged more individuals to seek higher education as a means of finding new employment. This has driven the total student population at these 12 institutions to increase by 170,000 students compared to the average population of 2009, and there are still three quarters remaining in the year. [Read the full article]