clock menu more-arrow no yes

Filed under:

6 no-load funds can bring stocks back to safer investment ground

While stocks have snapped back from last October's plunge, the sell-off can still serve as a useful dress rehearsal for investors.

History tells us that market drops of 20 percent or more occur once every four to five years, and it takes time to recover lost ground.We aren't predicting a bear market, and when one comes, it needn't cause you to abandon your investment plan. But if you're more heavily invested in aggressive funds than you'd like to be, now's the time to get on safer ground.

To that end, we have identified six no-load funds, one of which may be perfect for the low-risk portion of your portfolio.

- T. Rowe Price Equity Income (1-800-225-5132) has delivered good performance with minimal fluctuations. Manager Brian Rogers buys stocks of large, undervalued companies.

- Vontobel U.S. Value (1-800-527-9500) also buys stocks of large, undervalued companies. Manager Edwin Walczak has one-fourth of assets in cash.

- Royce Premier (1-800-221-4268) is one of the lowest-risk funds that invests in stocks of small companies. Charles Royce has been hunting for bargains among such stocks for more than 25 years.

- Greenspring (1-800-366-3863) is a little gem. With a mixture of small-company stocks (many of them financials) and low-quality "junk bonds," Greenspring fell only 3.5 percent in the correction from Oct. 7 to Oct. 27 - the smallest loss among these funds.

- Vanguard Star (1-800-635-1511) is only a little more volatile than Greenspring. It offers investors a portfolio of 62 percent stocks, 25 percent bonds and 13 percent cash by investing in other Vanguard U.S. stock and bond funds.

- T. Rowe Price Capital Appreciation (1-800-225-5132) is one of the lowest-risk stock funds in America, with less than half the volatility of the S&P 500. It declined just 4 percent in October's sell-off.