Investing October 25, 2001

Throwing Lemons: Worst Funds According to Doug Fabian

October 25, 2001 (PLANSPONSOR.com) - If you are a sponsor considering the addition of some new funds to your plan's offerings, checking out Doug Fabian's Lemon List might be a good idea.
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Fabian, editor of the Maverick Advisor, an investment advisory service, has been publishing the list since 1998. In it, he compares the performance of all equity funds with five-year track records with their peer group averages.

To be considered a lemon, a fund must underperform its peer group by 25% for the last 12 months, and also underperform for the last three and five years.

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A few of the losers this quarter are a group of 54 balanced funds, which comprise 22% of the total lemon list assets. Balanced fund portfolio managers follow a risk-adjusted strategy, using stocks and bonds. Many advisers recommend balanced funds to clients who want to avoid market volatility.  

A few of Fabian’s lemons:

  • AIM: Balanced Fund; A, B
  • Vanguard LifeStrategy Growth
  • Scudder Total Return; A, B, C
  • AXP: Mutual; A, B, Y
  • Fidelity Advisor Balanced; T, A, Ins
  • MainStay: Total Return; B, A
  • Liberty: Liberty Fund; A, B, Z
  • Evergreen Foundation; B, I A, C
  • Columbia Balanced
  • INVESCO Balanced; Inv           


 

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