Fund-research firm Morningstar has finalized the year-end performance numbers, so we've updated SMI's Personal Portfolio Tracker and monthly Fund Performance Rankings with performance data through Dec. 31, 2020.
• The Personal Portfolio Tracker: SMI's fund-performance database tracks the monthly returns of more than 25,000 traditional mutual funds and ETFs. The Tracker can filter that large amount of data and produce a concise report covering only the funds available in your plan(s), thus making it easier to apply our Fund Upgrading strategy to your 401(k), 403(b), or another retirement plan.
As you may be aware, SMI's Upgrading formula for domestic funds is now guiding Upgraders toward either growth or value funds as appropriate, rather than maintaining both growth and value allocations at all times. Accordingly, the SMI newsletter is using only two domestic categories: Large Company and Small Company.
However, Tracker portfolios will continue to classify holdings according to four domestic stock-fund categories: Large/Growth and Large/Value along with Small/Growth and Small/Value.
This will help members who use alternatives to our "official" recommendations more easily see (based on the Tracker's percentile-ranking column) how their particular funds are performing relative to similar funds. Upgrading calls for selling a fund when it drops below the top quartile of its peers, so having a clear view of a fund's relative performance is important for maintaining that selling discipline.
Another difference between the Tracker and the newsletter is that Tracker portfolios will continue to show a separate Foreign category, even though Foreign is now a subset of the "Situational" category in the newsletter.
Any fund that doesn't fit within the five categories mentioned above (including, for example, the commodities fund currently recommended in the newsletter's "Situational" category) will be displayed in a Tracker portfolio in the category "Other Funds."
• Fund Performance Rankings (FPR): The FPR report is a 38-page downloadable PDF file containing performance data and SMI's momentum rankings for more than 1,600 no-load traditional funds and ETFs.
The funds included in the FPR are selected based on asset size, brand familiarity, and brokerage availability.
As with the Tracker, the FPR will continue to show the four risk categories mentioned above for domestic funds (Large/Growth, Large/Value, Small/Growth, Small/Value — both for traditional funds and ETFs), as well as the Foreign category. The FPR lists funds by many other categories as well, including Bond funds, Target-Date funds, and Sector funds.
Check page 2 to learn how to use the FPR report. Page 3 includes an overview of the 70+ risk categories that will help you compare "apples to apples." Page 4 has explanations of the various data-column headings.