Funds Watchlist Singapore 2018: Here are the funds to watch from Vanguard, Fidelity, and Charles Schwab
2018 promises to be one of the most challenging years when it comes to investing, amidst growing concerns that the capital markets may get overheated. Stocks are already at record highs and valuation above historical mean. Investors are already bracing themselves for one of the most volatile years, as momentum continues to hit the wall of uncertainty.
Smart investors are likely to ignore short-term noise and instead focus on the larger cycle amidst the growing concerns. However, the big question remains whether 2018 will be another year of double-digit gains as was the case last year.
No matter the outcome, funds will remain the center of attention as a way of diversifying investment holdings. Investment funds have generated excellent returns over the past year, much to the delight of most investors. As it stands, the momentum should continue this year given the economic trends.
Vanguard, Charles Schwab, and Fidelity Investments are some of the top fund managers whose funds are expected to be at the center of attention as investors look for ways to diversify their portfolio with exposure to various sectors.
Vanguard Funds to Watch in 2018
Vanguard is arguably one of the best and ideal investment vehicle for investors looking for a good feel of the stock market. It is considered the world’s largest provider of mutual funds and the second largest provider of ETFs. The firm offers brokerage services as well as variable & fixed annuities, educational account services, financial planning and asset management service.
The firm is better known for its outstanding selection of high quality and low-cost mutual funds as well as Exchange traded funds. For any investor wishing to use Vanguard for investment purposes, the most challenging part should be which fund to go with.
Below are some of Vanguard’s top performing funds that any investor should pay close attention to.
Vanguard Wellesley Income (VWINX)
Vanguard Wellesley is a high quality and conservative mutual fund. The fund is perfectly suited for income-focused investors as it boasts of some of the best dividend stocks. Its diverse blend of high-quality stocks and bonds makes it a perfect fit for investors looking to diversify their portfolio.
The 50-year old fund maintains a balance of 60-65% bonds and 35-40% of stocks. It is ranked among the best funds to hold for the future, given its ability to limit shareholder risk while delivering above-average returns.
The fund charges a modest 0.22% expense ratio to investors. Admiral class shares are also available to those who invest a minimum of $50, 000. The minimum initial investment in the fund is $3,000.
Its yield stands at 2.78% for interest payments on bonds as well as dividends from stock holdings. The fund offers dividend payouts every quarter. With an average annual return of 7% over the past 10-years, the fund is perfectly suited for investors who want to minimize their risk in the capital market while enjoying a reliable stream of income.
Vanguard International Explorer (VINEX)
Vanguard International Explorer is a mutual fund that primarily invests in developed markets. It is thus suited for investors looking to bet on aggressive-growth international stocks. The portfolio holds about 10% emerging market stocks, with the remaining holding distributed across small-and mid-cap international stocks.
Its higher relative risk and high returns come from its increased focus on smaller overseas companies.
The fund returned an average of 21.8% in the first half of 2017, outperforming shares MSCI World Index.
Its expense ratio stands at 0.41% and requires a minimum initial investment of $3,000.
Vanguard Energy (VGENX)
A rebound of the energy sector has already triggered optimism about investment opportunities after years of downturn. With oil prices stabilizing above the $50 a barrel mark, it is becoming increasingly clear that this is one of the sectors to watch out for in 2018.
Vanguard Energy has emerged as one of the smart holdings in the sector amidst ongoing recovery. VGENX invests in companies that are engaged in the business of production, marketing, and transmission of energy. It deploys passive management to track the performance of MSCI US Investable Market Energy Index.
Over the last three months, the fund has returned an average of 10.7% to investors. Its expense ratio stands at 0.4% compared to the category average of 1.49%.
Vanguard Health (VGHCX)
Just like the energy sector, healthcare looks like a smart bet for 2018. That said Vanguard Heath should be a perfect fit for investors looking for some exposure in the sector. The high flying mutual fund returned an impressive 21% last year, beating the S&P and Dow Jones in the process.
The fund’s portfolio allocates only 15% of its asset on more aggressive, high flying biotech stocks. Focus is mostly put on high-quality blue-chip stocks such as Bristol Myers, United Health Corp, and AstraZeneca.
Vanguard Health Expense ratio stands at 0.37% and requires a minimum initial investment of $3,000.
The fund has averaged about 15% over the past decade with the growth coming in recent years.
Top Fidelity Investments Funds To Watch In 2018
Fidelity Investments is a leading provider of actively managed funds and the third largest in the U.S. in terms of assets under management. It has total assets of $6 trillion and $2.3 trillion under management.
The company provides brokerage services as well as wealth management services and investment advice. The firm offers a wide range of actively managed funds and low-cost index funds. Below are some of its funds that are expected to generate significant returns for investors in 2018.
Fidelity Contrafund (FCNTX)
Fidelity Contrafund is a perfect depiction of Fidelity’s outstanding management, low expenses, and top-notch performance. It is one of the most widely held funds by 401k plans and other retirement plans. Upon its launch in 1967, the fund focused on out of favor stocks as well as sectors.
It has since evolved and now focuses on achieving capital appreciation by picking top performing stock in a wide range of sectors. Fidelity Contrafund mostly focuses on U.S large-cap stocks with market valuation of more than $10 billion.
The Fund boasts of an 8.5% annual average return with a lifetime return of about 12.5%.
Its Expense ratio stands at 0.68% and requires a minimum initial investment of $2,500.
Fidelity Nasdaq Composite Index (FNCMX)
Fidelity Nasdaq Composite passively tracks the Nasdaq Composite Index thus allowing investors to gain exposure to a portfolio of growth stocks such as Apple and Amazon. It is considered a growth fund because of its heavy exposure to technology and consumer sectors.
The fund boast of a one-year average return of 6.82% and a three-year average return of 19%.
Data suggests that this fund has a long-term record of outperforming the average growth fund by wide margins.
The fund carries five star Morningstar rating and requires a minimum investment of $2,500. Its expense ratio stands at 0.43%.
Fidelity Select Banking Portfolio (FSRBX)
Financial stocks are expected to be on a roll in 2018 especially on the overhaul of the U.S tax system. Rising rates and low regulation have already made the sector, investor’s choice, as banks continue to post impressive returns.
Fidelity Select Banking Fund is already emerging as a must watch in the space given that it boasts of banking stocks such as Wells Fargo, U.S Bancorp, and BAC. The fund also has exposure to brokerage and insurance companies.
Fidelity Select has an expense ratio of 0.79% and requires a minimum initial investment of $2,500.
Fidelity Select Health Care Portfolio (FSPHX)
Health stocks and the health sector as a whole has remained resilient over the past one year. The trend is expected to continue this year, presenting unique opportunities for investors to generate significant returns through a high flying mutual fund, Fidelity Select Health Care Portfolio.
Another reason to invest in the health sector has to do with the fact that most funds in the space act as good defensive plays when the market resorts to a downtrend.
FSHCX invests in companies involved in the ownership and management of hospitals as well as nursing homes and health maintenance organizations.
The fund boasts of annualized returns of 11.7%.
Its expense ratio stands at 0 .74% and requires a minimum initial investment of $2,500.
Charles Schwab Funds To Watch In 2018
Charles Schwab is a leading discount broker that offers a line of investment products including mutual funds and ETFs. The firm’s funds boast of low expenses on investments as well as high ratings on Morningstar and no front-end loads.
The fund had a total of $77.6 billion in ETF assets under management as of mid-last year, making it the fifth largest in the U.S. While it was late to the party, Charles Schwab boasts of some of the cheapest funds in several categories, compared to the other two companies that have been in business for much longer.
Below are some of its top performing funds:-
Schwab S&P 500 Index Fund
This is a low-cost fund that tracks the S&P 500. It boasts of an annual expense ratio of just 0. 03% making it the most affordable of any S&P 500 tracker. It is also one of the most accessible funds in the market. For as little as $500, would-be investors can invest in the fund.
The fund is passively managed and seeks to achieve the same returns as large-cap stock indices. It boasts of a 10-year annualized return of 7.46%, identical to S&P 500 which stands at 7.50%.
Schwab International Core Equity Fund
Schwab International Equity Fund comprises of international holdings and is actively managed. It has over 195 stocks spread around the world with Japan, U.K, and German stocks accounting for more than half of the fund assets.
Large-cap stocks account for more than 37% of the fund’s total assets. Over the past 3 years, the fund has outperformed the MSCI EAFE index. However, the fund is not an ideal fund to hold outside a retirement account because it is actively managed with a turnover ratio of about 90%. The fund also has an annual expense ratio of 0.86%.
The fund has a 10-year annualized return of 6.75% compared to the benchmark index average return of 7.50%.
Schwab Total Stock Market Index Fund
This fund tracks the Total Stock Market Index which means it provides investors with exposure to almost every stock on American Exchanges. The fund comprises of about 2,400 stocks mostly made up of ‘investable’ company stocks.
Its performance does not differ a great deal from the S&P 500 except for small variations because of the small and mid-cap stocks that account for about 10% of total assets under management.
Schwab U.S Dividend Equity
The fund closely tracks, before deduction of fees and expenses, the total return of the Dow Jones U.S Dividend 100 Index. It also invests at least 90% of its net assets in stocks included in the index. The fund holds just over 100 stocks concentrated mostly on technology and consumer stocks.
Schwab U.S Dividend Equity was one of the top performing funds in 2017 with a gain of 23%.
It boasts of a dividend yield of 2.64% which has risen from $0.90 as of 2012 or $1.35 as of last year.
Its expense ratio stands at 0. 07%.
Schwab International Small Cap Equity
The fund’s portfolio is mostly made up of stocks of small-cap companies. It tracks the FTSE Developed Small Cap ex-US Liquid index, which is one of the least expensive small-cap ETFs. The fund’s holdings is also made up of stocks from Canadian companies which account for 17.3% of the total assets under management. UK companies account for about 34% of the fund’s total holdings.
Its expense ratio stands at 0.12%. The fund is up by more than 15% year to date and should continue to post stellar returns given the momentum in the capital markets.