Tough January and Bruce Berkowitz

It was a tough month for equity funds.


Here’s quick summary table showing average fund total return for January, organized by SubType:



Table reflects 9,095 rated funds, oldest share class only, at least three months old, excludes money market funds. Assets under management (AUM) data reflect all share classes.


More on some specific fund observations shortly, but one of largest funds by AUM, Fidelity Select Portfolios: Biotechnology Portfolio (FBIOX), dropped a heart-stopping 27.5%.


Some other notables with steep monthly pullbacks:


  • Dodge & Cox International Stock (DODFX): -9.4% … on top of -4.8 in Dec and -1.6 in Nov.
  • T Rowe Price Growth Stock (PRGFX): -9.1
  • Oakmark International I (OAKIX): -9.0
  • Fidelity Growth Company (FDGRX): -10.6
  • iShares MSCI Japan (EWJ): -8.2
  • iShares MSCI Emerging Markets (EEM): -6.6
  • American SMALLCAP World A (SMCWX): -9.2
  • T Rowe Price New Horizons (PRNHX): -9.3
  • Vanguard Health Care Inv (VGHCX): -8.9
  • Fidelity OTC Portfolio (FOCPX): -12.7


On the other hand:


  • Consumer Staples Select Sector SPDR (XLP): +0.6%
  • iShares US Preferred Stock (PFF): +1.0
  • iShares TIPS Bond (TIP): +1.5
  • PIMCO Income Inst (PIMIX): +0.3
  • T Rowe Price New Income (PRCIX): +1.0
  • iShares Core US Aggregate Bond (AGG): +1.4
  • Dodge & Cox Income (DODIX): -0.1
  • DoubleLine Total Return Bond I (DBLTX): +1.3
  • Vanguard Total Bond Market II Index Inv (VTBIX): +1.4
  • PIMCO Total Return Inst (PTTRX): +1.0
  • Vanguard Wellesley Income Inv (VWINX): -0.2


Market seemingly headed to bear territory, as of month ending January, many U.S. Equity sectors are already down 20% or more. See the MAXDD numbers in past year performance data below (btw … a plus sign on the Recovery metric, which represents months of drawdown, means the drawdown continues):


Many others down more than 10%, into so-called correction territory…



And those few sectors sparred (below) seem to be headed south so-far in February.



Hard times lately for our hero Bruce Berkowitz … massive drawdowns and substantial under-performance these past 12 months for all his funds:



Flagship FAIRX is in fact an MFO Three Alarm fund, which means bottom quintile absolute return in its category for the past 1, 3, and 5 years.


The difference in FAIRX volatility between its first 7 years of existence (Cycle 4) versus the last 9 years (Cycle 5) is astounding …