Kip 25

A Good Year for Most of the Kip 25 Funds

More winners than losers among our favorite low-cost mutual funds.

Almost every major investment category, from bonds to shares in U.S. and foreign companies, had a bang-up year in 2019. How did our Kiplinger 25 funds do? On average, our bond and international stock choices shone; the group’s U.S. stock funds were a mixed bag (all returns are through December 31).

Falling interest rates helped bond funds (when rates fall, bond prices rise). The Kip 25’s seven selections averaged a 9.4% return in 2019, led by a 15.8% jump in Vanguard High-Yield Corporate. The group beat the benchmark Bloomberg Barclays U.S. Aggregate Bond index (up 8.7%). The worst performer was DoubleLine Total Return Bond. The fund lagged the Agg index largely because the fund avoided corporate debt, a key driver of the index’s returns in 2019.

The Kip 25’s foreign-stock funds finished 2019 solidly. Three of them—AMG TimesSquare International Small Cap, Fidelity International Growth and Oakmark International—outpaced the MSCI EAFE index in 2019. Baron Emerging Markets edged past the MSCI Emerging Markets index.

Our U.S. stock funds struggled to beat the broad-market benchmark in a banner year. Standard & Poor’s 500-stock index gained 31.5%, its best year since 2013. Two Kiplinger 25 funds beat the bogey: DF Dent Midcap Growth, with a 40.1% return, and T. Rowe Price QM U.S. Small-Cap Growth Equity, up 32.8%. T. Rowe Price Dividend Growth and Blue Chip Growth came close to the index return.

The other eight U.S. stock funds lagged the S&P 500. Large-company stock funds fared better than those that invest in smaller firms, and growth-oriented funds beat value-focused ones. Dodge & Cox Stock and T. Rowe Price Value each trailed the S&P 500 by more than five percentage points, but they did better than Wasatch Small Cap Value, which focuses on small-company stocks trading at bargain prices.

Keep in mind that one-year returns are a blip in a long-term investment. Primecap Odyssey Growth, for instance, lags the S&P 500 on a one-year basis, but the fund’s three-, five- and 10-year records still beat it.

Most Popular

In What Order Should You Tap Your Retirement Funds?
retirement planning

In What Order Should You Tap Your Retirement Funds?

Should you go with your IRA first or your brokerage account? Pulling money haphazardly can have negative implications. Instead follow this road map fo…
June 28, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
An Easy Way to Find How Much You Will Spend in Retirement
retirement planning

An Easy Way to Find How Much You Will Spend in Retirement

One simple math equation can help you determine where to start building your retirement income plan, and whether your money should last.
June 27, 2022

Recommended

Move Over ETFs: Direct Indexing Is an Investment Strategy Worth Paying Attention to
investing

Move Over ETFs: Direct Indexing Is an Investment Strategy Worth Paying Attention to

More flexibility, more control, the potential for higher returns and tax-reducing strategies: With pros like that, could direct indexing be right for …
June 25, 2022
Janus Henderson Global Equity Income Fund Hangs Tough
Kip 25

Janus Henderson Global Equity Income Fund Hangs Tough

A focus on dividend payers and defensive stocks has kept the Janus Henderson Global Equity Income Fund afloat in a rough market.
June 23, 2022
Ron Baron: A Fund Legend Shares Stock-Picking Secrets
mutual funds

Ron Baron: A Fund Legend Shares Stock-Picking Secrets

The ability to buy and hold great growth companies for the long term is important to becoming a successful investor.
June 22, 2022
Baron Funds: The Masters of Growth Investing
mutual funds

Baron Funds: The Masters of Growth Investing

The Baron Funds have an extraordinarily long and successful track record. Here's how they do it.
June 22, 2022