8 Relatively Low-Risk Equity Funds
These mutual funds lost the least in the bear market.
After my column on low-risk bond funds, some folks asked me to do the same exercise with equity funds. Once again, I ran 10-year maximum drawdowns for Morningstar 500 equity funds, and I'll highlight those with the lowest figures below.
As you can see, even a lower-risk stock fund has plenty of risk. The bond funds I wrote about had minuscule losses, whereas these funds lost more than 30% from peak to trough. The 2007-09 bear market hammered equities of all kinds, so that even the most-cautious funds suffered big downdrafts. This is why I used the word "relatively" to modify "low risk." All equities and equity funds have risk. For benchmark purposes, keep in mind that S&P 500 funds' max drawdown was just above 50%, so losses in the 30% area were a huge improvement.
Russel Kinnel has a position in the following securities mentioned above: RYSEX, MAPIX. Find out about Morningstar’s editorial policies.