Fund Watch


Kiplinger 25 Model Portfolios

Nellie S. Huang

Reach your investment goals with these plans using our favorite no-load mutual funds.



We've constructed three portfolios using only funds from the Kiplinger 25,our list of our favorite no-load mutual funds, designed for investors with different goals, time horizons and levels of risk tolerance. (See Kiplinger's 25 Favorite Funds for the complete list of funds with their performances.) If you find them too aggressive, cut back each basket's allocation to stocks by up to ten percentage points. If you're bullish on stocks and don't lose sleep when the market turns hostile, cut back on your allocation to bond funds and hold more in stock funds.

SEE ALSO: Our Complete Guide to the Kiplinger 25

For Retirement: 11+ years away

Mairs & Power Growth (MPGFX ): 20%
Homestead Small-Company Stock (HSCSX): 15%
Akre Focus (AKREX): 15%
Dodge & Cox International Stock (DODFX): 15%
Harding Loevner Emerging Markets (HLEMX): 10%
Matthews Asia Dividend (MAPIX): 5%
DoubleLine Total Return Bond (DLTNX): 10%
Fidelity New Markets Income (FNMIX): 10%

With growth as the primary goal, this portfolio holds 80% in stock funds. Much of that is in three overseas funds: Dodge & Cox International Stock, which invests mostly in established markets; Harding Loevner Emerging Markets, which homes in on opportunities in fast-growing developing countries; and Matthews Asia Dividend, which mitigates the risk of investing in a high-growth but volatile region by buying dividend-paying stocks. The other stock funds focus on U.S. companies and are fairly evenly divided among a large-company fund (Mairs & Power Growth), a midsize-company fund (Akre Focus) and a small-company fund (Homestead Small-Company Stock).

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That leaves 20% of the portfolio divided between Fidelity New Markets Income, which invests in debt issued in emerging nations, and DoubleLine Total Return, which focuses on mortgage bonds. This portfolio requires a minimum of $50,000 to create in a taxable account or an IRA

For College: 6-10 years away

Akre Focus (AKREX): 10%
Fidelity Low-Priced Stock (FLPKX): 10%
Vanguard Dividend Growth (VDIGX): 15%
Mairs & Power Growth (MPGFX): 15%
Dodge & Cox International Stock (DODFX): 10%
Matthews Asia Dividend (MAPIX): 10%
Osterweis Strategic Income (OSTIX): 20%
Fidelity New Markets Income (FNMIX): 10%

This package is ideal for building up a tuition fund for a kid with Ivy League stars in his eyes. Or you can use it for other goals &mdash say, an approaching retirement in a decade (or a bit sooner). The portfolio includes some sizzle in the form of Fidelity New Markets Income, which focuses on emerging-markets debt, and Matthews Asia Dividend, which invests in dividend-paying stocks.

But the package also includes steak &mdash steadier names to temper volatility. Vanguard Dividend Growth targets high-quality companies that regularly boost their dividends. Osterweis Strategic Income, a multisector bond fund, has big bets on short-term, high-yield debt; but the fund has been half as volatile over the past ten years as its typical peer. This portfolio would require a minimum of $25,000 to replicate in a taxable account and $20,000 in an IRA.

For Income: 3-5 years away

Vanguard Dividend Growth (VDIGX): 25%
Dodge & Cox International Stock (DODFX): 5%
Matthews Asia Dividend (MAPIX): 5%
Osterweis Strategic Income (OSTIX): 15%
Met West Unconstrained Bond (MWCRX): 10%
DoubleLine Total Return Bond (DLTNX): 15%
Harbor Bond (HABDX): 5%
Fidelity New Markets Income (FNMIX): 15%

Vanguard Short-Term Investment-Grade (VFSTX): 5%

This portfolio is designed for investors who want income and some growth. But it's also suitable for short-term savings goals, with the understanding that the closer you get to your goal, the more you need to cut back on your allocation to stock funds.

The package has 35% of its assets in three stock funds: Vanguard Dividend Growth, Matthews Asia Dividend and Dodge & Cox International Stock. The rest of the portfolio sits in bond funds. All are well positioned for an eventual rise in rates, but in different ways. Metropolitan West Unconstrained Bond is focusing on non-agency mortgage-backed securities and emerging-markets debt, while Osterweis Strategic Income specializes in short-term, high-yield bonds. It would require a minimum of $60,000 to create in a taxable account or an IRA.




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