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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Mutual Fund (Winners) Test Portfolio

Class Elliott Wave Fundamentals Psychology Quiz Research Setups Software Tutorials More...
Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 02/22/2017
20,776 32.60 0.2%
9,449 -83.20 -0.9%
682 2.42 0.4%
5,861 -5.32 -0.1%
2,363 -2.56 -0.1%
YTD
5.1%
4.5%
3.4%
8.9%
5.5%
Tom's Targets    Overview: 02/14/2017
21,150 or 20,000 by 03/15/2017
8,800 or 9,700 by 03/01/2017
700 or 640 by 03/01/2017
5,950 or 5,650 by 03/01/2017
2,400 or 2,260 by 03/01/2017
Indus strength: None YTD
Mutt Losers: None YTD
Mutt Winners: None YTD

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

This page shows a test portfolio based on trading Vanguard mutual funds showing the best performance. You can find background information and what my tests revealed in Trading Mutual Funds.

Warning: I am not recommending that you use this portfolio to build a trading system or to trade the funds listed in the portfolio. I just show this model as an experiment of how a system based mutual fund portfolio would do in real life.

You should conduct your own research to verify this trading idea and performance before relying on the results. Historical testing may not reflect real-time trading and past performance does not guarantee future results. See Privacy/Disclaimer for more information.

 

Mutual Fund (Winners) Test Portfolio Overview

As mentioned previously, for full details on the historical experiments used to test this trading setup, see Trading Mutual Funds.

The idea behind this portfolio is simplicity itself: Trade the winners. Periodically review the portfolio and substitute another fund if it is performing better than one owned.

Portfolio Construction Rules

I used the following guidelines to construct and maintain the portfolio.

  • Use only Vanguard funds.
  • Use Index (any fund with the word Index in its name) and non-index funds.
  • No commissions or fees are charged (so any fund having a buy/sell fee is excluded).
  • Fractional shares are allowed.
  • Funds with a minimum hold time over 2 months are excluded (such as a 1 year minimum hold time).
  • All trades occur at the net asset value (NAV) the next trading day after a signal.
  • No duplicates allowed (each fund held is different).
  • The portfolio begins with $100,000, split evenly between the two funds ($50,000 each).
  • Proceeds from sales are used to buy the next fund without any redistribution of cash. That means if a sale has a value of $65,000, the full $65k is used to buy the next fund, not split between the funds.
  • Rank the funds for performance over the prior month.
  • Buy the two best performing funds in the list.
  • Hold each fund for a minimum (no maximum) of 7 months.
  • After holding for 7 months, check monthly (the first trading day of each month) if the prior month's performance of an owned fund is worse than the best performing fund in the list of available funds. If so, then replace the held fund with the better performer.

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Mutual Fund (Winners) Test Portfolio Trading Tips

The historical performance of this portfolio is better than one based on trading the worst performing funds.

Index and non-index funds work better than either index or non-index funds alone.

The Portfolio

In the table, the Buy/Sell columns show the dates when shares were purchased/sold at the NAV. The Net Change column is the profit or loss of the trade, expressed as a percentage (shares x sell price) - (shares x buy price). If the trade is still open, the closing price as of the date the list was created is used as the sale price. The S&P Change column is the change in the S&P 500 index between the Buy and Sell dates, using the opening prices. The Max Loss column shows the largest drop below the buy price during the time the fund was held.

-- Thomas Bulkowski

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StockBuySharesPriceSellPriceNet
Change
S&P
Change
Max
Loss
VMVIX02/04/20082,902$17.2310/02/2008$13.99-18.8% -16.8%-17.9%
VISVX02/04/20083,966$12.6110/02/2008$11.17-11.4% -16.8%-12.8%
VEIPX10/02/20082,961$13.7106/02/2009$11.32-17.4% -18.8%-40.9%
VHDYX10/02/20083,489$12.7006/02/2009$10.27-19.1% -18.8%-43.8%
VFWIX06/02/20092,942$12.1801/05/2010$14.5119.1% 20.1%-8.8%
VGENX06/02/2009821$40.8501/05/2010$46.1212.9% 20.1%-17.2%
VSTCX01/05/20102,951$12.8209/02/2010$13.021.6% -4.6%-7.5%
VISGX01/05/20102,590$16.4809/02/2010$16.580.6% -4.6%-8.2%
VMGRX09/02/20104,051$10.6005/03/2011$14.0932.9% 25.8%0.0%
VPACX09/02/20104,779$8.0405/03/2011$9.3015.6% 25.8%0.0%
VWIGX05/03/20112,358$18.8501/04/2012$15.48-17.9% -6.1%-27.0%
VEURX05/03/20112,354$24.2401/04/2012$19.30-20.4% -6.1%-29.4%
VHDYX01/04/20122,920$15.5509/05/2012$17.089.8% 10.0%-0.3%
VEIPX01/04/20122,101$17.3709/05/2012$18.959.1% 10.0%-0.9%
VSTCX09/05/20122,197$18.1305/02/2013$21.2717.3% 12.7%-5.1%
VISGX09/05/20122,128$23.4405/02/2013$27.0015.2% 12.7%-5.5%
VPACX05/02/20134,445$10.5112/03/2013$10.691.7% 13.7%-10.1%
VTRIX05/02/20131,888$30.4312/03/2013$33.6810.7% 13.7%-6.9%
VSTCX12/03/20131,839$25.8308/04/2014$27.637.0% 7.0%-2.6%
VWUSX12/03/20132,770$22.9508/04/2014$24.968.7% 7.0%-1.3%
StockBuySharesPriceSellPriceNet
Change
S&P
Change
Max
Loss
VQNPX08/04/20142,044$33.8304/02/2015$36.788.7% 6.9%-3.9%
VPACX08/04/20144,517$11.2506/02/2015$11.451.8% 9.5%-10.3%
VSTCX04/02/20152,422$31.0412/02/2015$29.92-3.6% 2.0%-11.5%
VISGX06/02/20151,389$37.2503/02/2016$31.77-14.7% -6.3%-24.7%
VMGIX03/02/20161,182$37.3210/04/2016$41.3410.7% 9.4%-0.3%
VEXRX12/02/2015976$74.2710/04/2016$77.965.0% 2.9%-19.7%
VWIGX10/04/20163,345$22.74Open$23.252.2% 9.2%-8.7%
VGENX10/04/2016968$50.49Open$51.902.8% 9.2%-4.0%

 

Using completed trades only, a portfolio with a starting value of $100,000.00 would be worth $124,945.09, a change of 24.9%, with an maximum loss of 43.8%.
Including open trades, the starting value is $100,000.00 and the ending value is $128,018.54, a change of 28.0%, with an maximum loss of 43.8%.
This report was prepared on February 22, 2017 and it covers the trades shown.

See Also

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Q: What is a man's idea of helping with the housework? A: Lifting his leg so you can vacuum.