Investing Returns for 2017

Minimum Variance Portfolio with 3 Assets. Mar-2013.
Photo courtesy Standard Fotos

Financial Year 2017 is in the history books. Donald Trump had his first year as President. The year saw Europe take turn to the right. Once again, it’s time to review the investment returns of various asset classes for the past year. We’ll look at Vanguard Mutual Funds, because they are readily investable and low cost.

Executive Summary
2017 was a banner year for most investors. Equity risk was rewarded big time. Total U.S. Stock Market gained an amazing +21.05%, while Total International stocks did even better 27.40% . Global stocks gained +24.06%.

Section 0. Global Stocks and Bonds
The two fundamental asset classes, stocks and bonds, both made money. Total World Stock Index (VTWSX) gained a huge +24.06% while Total Bond Market Index (VBMFX) gained a small +3.45% and Total International Bond Index (VTIBX) gained just +2.31%

Note that yields are low for both stocks and bonds.

Table 0.1 2017 Investment Return for Vanguard Total World Funds
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VTWSX	Total World Stock Index	21.41	2.65	24.06
VMNVX	Global Min Volatility	13.41	2.62	16.03
VBMFX	Total Bond Market Index	0.99	2.47	3.45
VTIBX	Total Intl Bond Index	0.09	2.22	2.31

Section 1. Stocks

While U.S. stocks had amazing returns, International stocks went up even more.

Table 1.1 2017 Investment Return for Vanguard Total Stock Index Funds
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VFINX	S&P 500 Stock Index	19.48	2.18	21.67
VTSMX	Total Stock Market Index	18.98	2.07	21.05
VGTSX	Total Intl Stock Index	23.83	3.57	27.40

Growth Crushed Value
Its was U.S. Growth stocks (VIGRX) turn this year. U.S. Value stocks (VIVAX) also had decent returns.

Table 1.2 2017 Investment Return for Vanguard U.S. Value and Growth Stock Funds
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VIVAX	Value Index	14.29	2.69	16.99
VIGRX	Growth Index	26.24	1.41	27.65

Large-Cap Beat Small-Cap
Large-cap (VLACX) had huge gains while Small-cap (NAESX) had good gain.

Table 1.3 2017 Investment Return for Vanguard Large and Small-cap U.S. Stock Funds
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VLACX	Large-Cap Index	19.78	2.12	21.89
NAESX	Small-Cap Index	14.59	1.51	16.10

Small-Cap Growth Had Tremendous Gains
Small-cap Growth won the prize this year. Up almost +22%. Small-cap value was okay.

Real Estate Investment Trusts (REITs) barely eked out a positive return. Disappointing.

Table 1.4 2017 Investment Return for Vanguard Small-cap U.S. Stock Funds
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VISVX	Small-Cap Value Index	9.72	1.95	11.67
VISGX	Small-Cap Growth Index	20.87	0.92	21.78
VGSIX	REIT Index	0.62	4.21	4.83

Dividend Stocks All Had Good Returns

International High-Dividend and Dividend Appreciation were the big winners.

Table 1.5 2017 Investment Return for Vanguard Dividend Stock Funds
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VHDYX	High Dividend Yield	13.08	3.29	16.37
VIHIX	Intl High Dividend Yield	18.43	3.86	22.29
VEIPX	Equity Income	15.38	3.01	18.38
VDIGX	Dividend Growth	17.04	2.29	19.33
VDAIX	Dividend Appreciation	19.79	2.35	22.15
VPU	Utilities ETF	9.01	3.51	12.50
VDC	Consumer Staples ETF	8.95	2.86	11.81

All International Markets Shoot the Lights Out
Emerging Market was the winner. Both Europe and Asia also were outstanding

Table 1.6 2017 Investment Return for Vanguard International Stock Funds
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VDMIX	Developed Market Index	NA	NA	NA
VEIEX	Emerging Market Stock Index	28.22	2.94	31.15
VEURX	European Stock Index	23.42	3.40	26.82
VPACX	Pacific Stock Index	25.18	3.21	28.39

Foreign Stock Sectors Go Crazy
The gains this year are ridiculous.

Table 1.7 2017 Investment Return for Vanguard International Stock Funds
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VTRIX	International Value	25.61	2.36	27.96
VWIGX	International Growth	41.76	1.20	42.96
VINEX	International Explorer	35.98	2.79	38.77
VGXRX	Global ex-US Real Estate	21.60	4.66	26.26

Section 2. Bonds
Rising interest rates hit short and medium Treasuries.

Table 2.1 2017 Investment Return for Vanguard Treasury Bond Funds
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VFISX	Short-Term Treasury	-0.75	1.14	0.39
VFITX	Intermediate-Term Treasury	-0.18	1.75	1.57
VUSTX	Long-Term Treasury	5.71	2.88	8.58
VIPSX	Inflation-Protected Securities	0.46	2.35	2.81

Very modest gains in Municipal bonds.

Table 2.2 2017 Investment Return for Vanguard Municipal Bond Funds
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VWSTX	Short-Term Tax-Exempt	-0.06	1.06	0.99
VWITX	Intermediate-Term Tax-Exempt	1.73	2.81	4.53
VWLTX	Long-Term Tax-Exempt	2.82	3.61	6.43
VWAHX	High-Yield Tax-Exempt	3.91	3.94	7.84
VCITX	California LT Tax-Exempt	3.38	3.42	6.81

In the corporate sector, bonds had small gains. Long corporates did best.

Table 2.3 2017 Investment Return for Vanguard Corporate Bond Funds
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VCSH	Short-Term Corp	0.16	2.27	2.21
VCIT	Intermediate-Term Corp	2.16	3.35	5.27
VCLT	Long-Term Corp	7.80	4.58	11.78
VWEHX	High-Yield Corporate	1.54	5.48	7.02

Section 3. Precision Metals

Palladium shines. Platinum lags. Is Platinum under $1,000 per troy ounce a good value?

Table 3.1 2017 Return for Bullion.
SYMBOL	METAL	TOTAL RETURN	PRICE $/troy oz
XAU	Gold Bullion	13.68	$1302.610
XAG	Silver Bullion	6.53	$16.917
XPT	Platinum Bullion	4.19	$929.917
XPD	Palladium Bullion	56.48	$1061.500
XCU	Copper Bullion	31.09	$3.27156 per lb

Similar for the ETFs.

Table 3.2 2017 Return for Precision Metal ETFs.
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
GLD	Gold ETF	12.84	0	12.84
SLV	Silver ETF	5.82	0	5.82
PPLT	Platinum ETF	2.56	0	2.56
PALL	Palladium ETF	55.87	0	55.87

Section 4. Balanced Funds

Many investors hold a balanced portfolio. Double digit returns, provided there was enough allocation to stocks.

Table 4.1 2017 Investment Return for Several Vanguard Balanced Funds.
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
VBINX	Balanced Index	11.60	2.15	13.75
VWINX	Wellesley Income	7.02	3.13	10.16
VWELX	Wellington	11.93	2.79	14.72

Warren Buffet beat Harry Browne.

Table 4.2 2017 Investment Return for Unique Portfolios.
SYMBOL	FUND NAME	CAPITAL RETURN	INCOME RETURN	TOTAL RETURN
BRK.A	Berkshire-Hathaway	21.91	0	21.91
HBPP	Harry Browne Permanent Portfolio			10.81

The Harry Browne Permanent Portfolio showed a respectable 10.81% total return in 2017, similar to other balanced investors. This portfolio splits equally between stocks, gold, long-term Treasuries and cash. It is important to re-balance each asset back to 25% at the start of the year. Otherwise your asset allocation and performance will drift.

Total Stock Market (VTI) was up +21.21%, while the price of Spdr Gold Shares (GLD) was up +12.81%. The 1/4 of the portfolio in iShares 20+ Year Treasury Bond (TLT) was up +8.95% and iShares 1-3 Year Treasury Bond (SHY) returned a paltry 0.26%. These numbers are from Morningstar.com.

Summary: Most Investors did great in 2017
There were no really bad spots in 2017, unless you were 100% in short-term Treasuries.

Balanced investor saw 7% to 12% total returns.

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