Doug Fabian's Mutual Fund Lemon List Uproots Q1, 2008 "Dividend Disasters"
Doug Fabian editor of the Successful Investing Newsletter, has released the latest version of his infamous Lemon List, a scorecard exposing the worst-performing mutual funds, based on their one, three and five year track records. Featured this quarter are value and dividend-oriented mutual funds.
Costa Mesa,CA (PRWEB) April 22, 2008 -- Doug Fabian, president of Fabian Wealth Strategies and editor of the Successful Investing newsletter, has just released the latest version of his infamous Lemon List, a scorecard exposing the worst-performing mutual funds. The new list, available at Fabian's Mutual Fund Lemon List, consists of 2,144 mutual funds totaling $870 billion in assets during Q1, 2008.
This quarter's Lemon List revealed significant underperformance in many value and dividend-oriented mutual funds. Generally considered conservative investment options, many value and dividend-oriented mutual funds experienced unusually sharp declines over the first three months of the year.
"If you think the first quarter was bitter for the market, then it was really sour for this quarter's value-oriented lemon funds," said Doug Fabian. "What we discovered this quarter is that many value fund managers were virtually asleep at the wheel when it came to steering clear of the hazards caused by the credit crisis."
Among the worst value and dividend-oriented mutual funds was the Legg Mason Special Investment fund (LMASX), which sank 23.2% in the first quarter. The Schwab YieldPlus Select (PZFVX) saw a sharp 19.8% decline in Q1, while the Legg Mason Value fund (LMVTX) was down 19.7%.
"Investors who own these dividend disaster funds should strongly consider repositioning their assets into much safer and better performing funds. Better yet, they should strongly consider a move toward low-cost, objectively managed exchange-traded funds," said Fabian.
The following is a list of the top 10 underperforming value and dividend-oriented mutual funds sorted by Q1 performance.
Top 10 Value & Dividend-Oriented Lemon List Mutual Funds, Q1, 2008 (see attachment for details)
- Legg Mason Special Investment Prim (LMASX) - $1997.7M in assets
- Schwab YieldPlus Select (SWYSX) - $4203.2M
- Legg Mason Value Prim (LMVTX) - $7142.3M
- Pioneer Value A (PIOTX) - $2788.4M
- Lord Abbett Mid-Cap Value A (LAVLX) - $4862.1M
- VANGUARD WINDSOR FUND (VWNDX) - $11492M
- Putnam Fund for Growth & Income A (PGRWX) - $8100.1M
- Vanguard Selected Value (VASVX) - $3842.9M
- Hotchkis and Wiley Large Cap Value A - (HWLAX) - $1711.3M
- JHancock Classic Value A (PZFVX) - $3366.8M
For a mutual fund to make it onto to Fabian's Mutual Fund Lemon List, it must under perform its benchmark average for the past one year, three years and five years. By comparing funds to their benchmark category average Fabian is able to compare a specific fund's performance with that of its peer group. This apples-to-apples (or in this case, lemons-to-lemons) comparison makes the Lemon List a unique tool investors can use to see if their mutual funds measure up.
Doug Fabian began publishing his Lemon List in 1998, but since its original publication the Lemon List has gone through a series of modifications to help it better reflect the current trends in the market. The latest Lemon List has been compiled by screening and comparing a universe of nearly 8,500 mutual funds.
The latest Mutual Fund Lemon List includes the 10 largest lemon funds, along with their performance data over the past one year, three years and five years. Each fund's category average performance is also listed, so investors can see just how poorly these 10 largest funds measure up to the average fund with the same objective.
10 Largest Lemon List Funds by Total Assets, Q1, 2008 (See attachment for performance details)
- Fidelity Equity-Income (FEQIX), $27171.7M in assets
- Templeton Growth A (TEPLX) - $23087.4M
- Fidelity Growth & Income (FGRIX) - $16179.3M
- Fidelity Dividend Growth (FDGFX) - $11749.1M
- Vanguard Windsor Fund (VWNDX - $11491.9M
- Van Kampen Comstock A (ACSTX) - $10864.9M
- Vanguard Asset Allocation (VAAPX) - $10592.9M
- Longleaf Partners (LLPFX) - $10384M
- Fidelity Investment Grade Bond (FBNDX) - $10367M
- Vanguard Pacific Stock Index (VPACX) - $10259.5M
The Lemon List also includes a complete list of mutual fund categories, along with their corresponding exchange-traded fund (ETF) alternatives.
Once a mutual fund advocate, Doug Fabian is now recommending ETFs to subscribers of his advisory services; for his managed accounts, and for his own personal accounts.
For a copy of the entire Mutual Fund Lemon List, or for further information please contact Darlene March at March Media Relations, (714) 887-8021, or email darlene @ marchmediarelations.com.
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