Wasatch Ultra Growth Fund Review

When Barron's touts a mutual fund, in this case the Wasatch Ultra Growth Fund (symbol WAMCX), it's usually worth looking at. The hard part is beating the S&P 500 stock index without cherry picking or other bias. Well here goes my analysis:

Source: Yahoo Finance Dividend Adjusted Historical Data

The above is the dividend adjusted performance of WAMCX versus the same for the SPY or SPDR S&P 500 ETF. This is a better comparison than with any index because you can BUY both the fund and the ETF. You cannot buy an index.

Anyway, as I see it, this fund does well against the benchmark! The continuously compounded rolling returns show the same story in numbers:

Of the nine standard time periods, (no cherry picking) WAMCX beats in seven, a stellar performance. A quick look at the chart shows the drawdowns look similar as well. While the year-to-date performance appears lacking (who knew the day after Christmas would be the bear's bottom?) its right on the mark, neck and neck, with us "never sell" indexers.

Feel free to post comments.

Disclaimer: Posts are for education only and not investment advice, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors.

New Highs Are BACK!

New all-time closing highs came within reach this past week to the major stock indexes. Not all joined the party; mainly the Russell 2000 small stock index was left out.

NASDAQ=NASDAQ Composite Index

DJIA=Dow Jones Industrial Average

S&P 500=S&P 500 Index

RUT=Russell 2000 Index

Rolling returns are surprisingly mixed:

Continuously compounded annualized returns.

Source: Yahoo Finance historical data.

The one year numbers are weak, reflective of obvious instability. Two to 10 year returns reflect the recovery from the depths of the market recession. The 20 year comps take us to before the dot-com bust and the 30 year annualized rates of return are the familiar expected long-term rates for the stock market. 

After last Sep 30's peak and the scare from last Christmas, we can all let out a sigh of relief that the market has recovered and so have our Vanguard accounts. But what about all our other accounts? What if we SOLD at the bottoms, likely, or were never in the market to begin with, more likely... What to do on tomorrow's opening?

Since there IS no right answer, the only answer left is the only good answer the market ever had since creation of the first index fund in 1975*. Buy and hold an index fund. Scale in and only sell when you need the money, otherwise ignore the prices, the headlines, the hucksters, the annuity salesmen, the noise and all the advisors who seek to justify unnecessary commissions or fees or whatever, and stay the course owning the broad based indexes in this ever changing shape shifting American stock market.  

*A case can be made, a strong case, that "growth and income" mutual funds from the 1920s-1950s were, given their long-term diversified investment policies, in effect "index" funds. 

Feel free to post comments.

Disclaimer: Posts are for education only and not investment advice, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors.