Kiplingers Personal Finance

05/2017 KIPLINGER’S PERSONAL FINANCE 55

the rest in high-quality bonds.

The process: Wellington Management

runs this fund. Ed Bousa, who has

picked stocks for the fund since 2003,

focuses on dividend payers. A trio of

fixed-income managers fill the bond

side of the portfolio with investment-

grade debt. The fund, which yields

2.4%, is available to new investors only

if purchased directly from Vanguard.

The track record: A fund with one-third

of its assets in bonds will never keep

The track record: Although the fund

posted a double-digit gain over the

past year, it’s hard to sugarcoat dis-

appointing results. Hurt by too big a

stake in drug stocks, Vanguard Health

Care trailed the average health fund

by 6.4 percentage points.

VANGUARD WELLINGTON

The focus: Income and growth gener-

ated by a balanced portfolio that keeps

60% to 70% of its assets in stocks and

SPECIALIZED/
GO-ANYWHERE FUNDS

VANGUARD HEALTH CARE
The focus: Companies that can cash in
on the long-term growth in health
care spending and medical innovation.
The process: Manager Jean Hynes looks
for newcomers that are at the forefront
of innovative drug-development tech-
niques and older firms that have
adapted quickly to new technologies.

Reach Your Goals With These Plans

We don’t expect anyone to use every fund in the Kiplinger 25 to build

a portfolio. And we encourage you to combine the actively managed

funds on our list with solid, low-cost index funds (see the box on

page 54). These three portfolios, each containing seven funds, are

designed to serve as a starting point. Ratchet down the stock alloca-

tion a bit if you have a low tolerance for risk or if you’re feeling ner-

vous about the market these days, or kick it up if you’re feeling frisky

and can withstand a large amount of short-term volatility.

PUTTING THE KIPLINGER 25 TO WORK

For Retirement

TIME HORIZON: 11 years or more

STRATEGY: The most-aggressive

portfolio, this package has 85% in

stocks and 15% in bonds.

For College

TIME HORIZON: Six to 10 years

STRATEGY: This portfolio, which is

designed for medium-term goals, has

65% in stocks and 35% in bonds.

For Income

TIME HORIZON: Five years or less

STRATEGY: Designed for conservative

investors, this package holds 70% of its

assets in bond funds. It yields 3.3%.

Mutual fund

% of

portfolio

Primecap Odyssey Growth 20%

Vanguard Equity-Income 20

Parnassus Mid Cap 15

Pimco Income D 15

T. Rowe Price Small-Cap Value 15

FMI International 10

T. Rowe Price International Discovery 5

Aggressive Portfolio Moderate Portfolio Conservative Portfolio

Mutual fund

% of

portfolio

Vanguard Equity-Income 20%

FMI International 15

Homestead Small-Company Stock 15

Met West Total Return Bond M 15

Pimco Income D 15

Primecap Odyssey Growth 15

Vanguard High-Yield Corporate 5

Mutual fund

% of

portfolio

DoubleLine Total Return Bond N 20%

Pimco Income D 20

T. Rowe Price Dividend Growth 15

Vanguard Equity-Income 15

Fidelity New Markets Income 10

Vanguard High-Yield Corporate 10

Vanguard Short-Term Inv Grade 10