Jason Browne Talks Stock & Bond Market Leadership on the MoneyLife Show

February 12, 2013

FundX Chief Investment Officer Jason Browne talked about what’s working so far in 2013 and what to do about the possibility of rising interest rates on Chuck Jaffe’s MoneyLife radio show on Friday February 8th. (You’ll find an MP3 file here).

“Our portfolios today are really a mix of about 50% foreign, 50% domestic, and the domestic tends to lean more towards mid-caps or mid-cap value,” Jason said. “We don’t hold any large-cap growth funds at this point.”

Large-cap growth funds were highly ranked for much of 2012, but they haven’t been top ranked in 2013 so far. “What we have seen coming up the ranks are funds that have a little more of a value tilt and are more in the mid-cap category as opposed to the largest companies,” Jason said.

In fixed income, Jason explained that he’s putting money into “bond funds that have a broader spectrum of fixed income that they can invest in, offer a little bit higher yield, and a little lower duration so they give you a little more protection in case interest rates were to rise.” He cited PIMCO Income (PONDX) as one example of this kind of fund.

In the “Hold It or Fold It” portion of the show, Jason responded to MoneyLife listener’s questions about funds and ETFs like Fidelity Emerging Markets (FEMKX), iShares MSCI EAFE Value (EFV), Permanent Portfolio (PRPFX), iShares iBoxx High Yield (HYG), and PIMCO Investment Grade Bond (PBDDX). Below, see whether Jason rated these funds as Buys, Holds or Sells.

Fidelity Emerging Markets (FEMKX) – “This is a good fund, but for us right now, I would consider it a sell,” Jason said. “We believe that for that level of risk, there are just a lot of other places you could put your money that are working better now. But when emerging markets come back up, we don’t see any reason why that one shouldn’t be on your radar.”

iShares MSCI EAFE Value (EFV) – “EFV is a fund that we hold,” Jason said. “We consider it a core fund and EFV is a buy.”

Permanent Portfolio (PRPFX) – “We view PRPFX, when we use it, as an alternative to fixed income,” Jason explained, but he pointed out that the fund hasn’t been performing as well as other funds. Given this, “it’s not particularly attractive right now.”

iShares iBoxx High Yield (HYG) –  “A lot of the time, especially when you get into something like high yield bonds, you’re better off sticking to mutual funds,” Jason said. “The reason for that is that they’re just less volatile, and they typically offer the same or better performance over time. So HYG would be a sell not so much because we’re concerned about the high yield space… but I’d prefer you look at something like a Janus High Yield (JAHYX), for example.”

PIMCO Investment Grade Bond (PBDDX) – “Great fund, great manager. I would say, though, if I was going to go with a PIMCO fund, I would rather see you go with PIMCO Income (PONDX).”  Why? With PONDX, Jason explained, “you get currently a higher yield…but you also have a much shorter duration and you’ve got more diversification.”

FundX president Janet Brown and CIO Jason Brown both appeared on the MoneyLife show last year. Click here to read about those appearances.

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