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Fund Spy

No Happy Holidays for Shareholders of These Funds

See who missed 2009's party.

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With many markets having rallied like crazy since March, this holiday season likely feels far more enjoyable for investors than last year's did. The fact that most equity funds aren't paying out taxable capital gains distributions this year adds to the feeling of relief.

But not everyone is sharing in the joy. Here are two funds whose shareholders won't be able to swap success stories around the fireplace in the coming weeks.

When Safe Isn't Safe
As I noted in a column a few months ago, the concepts of "safe" and "risky" can be misleading. Depending on when and how you buy them, even U.S. Treasury securities can be risky plays. Shareholders of Vanguard Extended Duration Treasury Index (VEDTX) learned that the hard way in 2009. In a year when nearly all stock funds have posted hefty gains and several categories of bond funds boast average returns greater than 20%, this fund has suffered a shocking 35.4% loss through Dec. 10.

Gregg Wolper does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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