How Top Funds Fared in the Stock Market Meltdown

If you’re too scared to check in on your portfolio, I don’t blame you. President Donald Trump’s tariff announcements have crushed markets around the world. I’ll take a peek so you don’t have to.

A quick tour of some of the largest funds tells the story. The short answer is that your stock funds and stocks got barbecued, and your bonds and bond funds are fine. As I write this on April 8, stocks are rebounding nicely to recoup a bit of those losses.

The whole Morningstar Style Box got smoked, but small value fell the hardest. The world economy is closely intertwined, whether a business is a small clothing manufacturer, a giant software company, a midsize insurer, or a pharmaceutical company. Small-value companies are not necessarily doing more global trade than the rest; it’s just that they are very sensitive to the economy, and the tariffs have sharply increased recession expectations. Some financial industry leaders say we are already in a recession.

3 Funds for a Recession

These funds usually hold up when the economy shrinks.

2m 6s Apr 8, 2025

Watch

Let’s check out the carnage as of the April 7 market close.

Vanguard Total Stock Market Index VTSAX

was down 9.85% for the week ended April 7 and 14.21% for the year to date. That was a little worse than the average large-blend fund, illustrating just how widespread the market pain is.

Vanguard Total Bond Market VBTLX was down 0.24% for the week and up 2.52% for the year. High-quality bonds tend to do well in recessionary environments. Also, index funds have less in lower-quality bonds than actively managed intermediate bond funds and thus tend to lose a little less in economic meltdowns.

American Funds Growth Fund of America AGTHX is a decent proxy for the large-growth and large-blend Morningstar Categories. It was down 9.33% for the week and 15.15% for the year. Both figures were a tad better than peers’. Technology stocks have been hit fairly hard because they do a lot of business overseas, and their valuations were fairly high before the tariffs.

American Funds Balanced ABALX was down 5.94% for the week and 6.16% for the year. Those numbers were a hair better than peers’ results and not surprising for funds holding a mix of stocks and bonds.

Pimco Income PONAX, one of the hottest-selling bond funds lately, was down 1.01% for the week and up 2.15% for the year. The year-to-date return was in the top 10% of the multisector bond category—a nice showing for manager Dan Ivascyn.

Fidelity Contrafund FCNTX was down 8.64% for the week and 12.34% for the year. Those figures were much better than those of large-growth peers. Will Danoff has been significantly underweight tech and also has a big position in Berkshire Hathaway BRK.B, which has held up nicely.

Dodge & Cox Stock DODGX was down 10.42% for the week and 7.25% for the year. That’s poor for the week but above average for the year. Names like Fiserv FI and RTX Corp RTX had a rough week but outperformed for the year to date.

Vanguard Emerging Markets Stock VEMAX was down 8.98% for the week and 7.07% for the year to date. I guess it’s a tiny victory for emerging markets to have lost a little less than the US after so many years of underperformance.

Vanguard Wellington VWENX dropped 6.46% for the week and 7.99% for the year to date. Both of those returns were subpar. Overweightings in stocks, specifically technology, have stung.

Dodge & Cox Income DODIX lost 0.40% for the week and was up 2.43% for the year to date. Both figures were top third in the intermediate core-plus bond category. The fund got more defensive in 2024 as it swapped corporate bonds for Treasuries.

With an 11.69% loss, Vanguard Primecap VPMAX had the worst week of the funds I looked at. For the year to date, it lost 12.6%, which was actually above average, but the weekly figure was in the bottom 2%. Global companies Eli Lilly LLY and FedEx FDX have been hit hard by the tariffs.

Vanguard Dividend Growth VDIGX lost 8.04% for the week and 7.95% for the year. That was an excellent top 10% showing in the large-blend category, and it supports my view that dividend growth is a good defensive play because it leads to high-quality companies with good balance sheets. The fund had lagged in the Magnificent Seven-driven rally, but it still plays defense well.

Finally, let’s check a couple of small-value funds, given that it was the worst-hit spot in the style box. DFA US Small Cap Value DFSVX was feeling all that pain with 11.23% and 18.50% losses for the week and year to date, respectively. Smaller companies are really hurting.

Meanwhile, Royce Small-Cap Special Equity RYSEX is living up to its reputation for playing defense. The fund’s 8.09% loss for the week was in the top 3% of small-value funds, and its 16.32% loss was above average for the year to date. (I own this fund.)

Top Funds in the Meltdown

Weathering the Storm

This is a difficult environment to be an investor. It’s hard to know if the tariffs are here to stay, and it seems certain that volatility will be extreme until it is resolved. When you build a portfolio, you should do so with a plan for surviving bear markets and profiting from bull markets.

Don’t kick yourself for failing to go all cash a month ago. Just track your investments and make sure the portfolio fits your plan for the future. If a fund is doing much worse than you expected it to do in a bear market, investigate why before you sell. Remember, it’s a marathon.