Good Bets from Goodall

03/25/2005 12:00 am EST


Leonard Goodall

Co-Editor, No-Load Portfolios

As might befit his former role as president of the University of Nevada Las Vegas, Dr. Leonard Goodall takes a disciplined approach to fund investing, emphasizing proper allocation, both among small and large caps, as well as domestic and foreign stocks. Here's his latest.

"Our latest focus fund is Vanguard Small Cap Value (VISVX ). Small cap funds had a good run last year, and this one is no exception. As a value fund, it does not have the aggressiveness of some funds, but for the past couple of years, small cap indexes have outperformed the large indexes such as the Dow and S&P 500. The fund has its largest holdings in financial services, industrial materials, and utilities. It is managed by George Sauter, known as Vanguard’s dean of index fund. The fund has a very reasonable expense ratio of just 0.27%. If you want a relative low risk exposure to small cap stocks, this is a good fund to consider adding to your portfolio.

"We also think that most investors should have some foreign holdings in their portfolios. Fidelity Global Balanced Fund (FGBLX ) is a fairly low risk way to add global investment to your portfolio. It includes bonds as well as stocks. Its current asset allocation is 70% in stocks and 17.8% in bonds, with roughly 11% in cash. Its largest investments are in the US (49%), Japan (19.6%), with additional holdings in the United Kingdom, Switzerland, and Germany. Among its major portfolio holdings are government bonds of Japan and Germany and US Treasury bonds. Its largest stock holdings include Telewest Global and Microsoft. Meanwhile, its 1.28% expense ratio is reasonable for an international fund."

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