AAII Model Portfolios Continue Their Strength Through April
Overall, the market continued to perform well through April. It has been well-documented that high-yielding stocks have performed well during the recent market rally. In addition, smaller-cap stocks have also performed well during this time. During April, however, larger market-capitalization stocks outperformed their smaller-cap counterparts; the S&P SmallCap 600 index was actually down for the month, the first time the index has retreated since last October. It could be just that smaller-cap stocks are seeing some profit-taking, or it may be the beginning of a pullback as small-cap stocks have gotten a little rich. At the end of April, the S&P SmallCap 600 had a price-earnings ratio of 20.4.
During the month, the large-cap S&P 500 index gained 1.9%, while the S&P MidCap 400 index gained 0.6% and the S&P SmallCap 600 index lost 0.3%.
For April, the Model Shadow Stock Portfolio gained 1.8%, outperforming the Vanguard Small Cap Index fund (NAESX), which gained 0.1%, and bettering the DFA US Micro Cap Index fund (DFSCX), which was down 0.8%. Year-to-date, the Model Shadow Stock Portfolio has gained 24.7%, beating the Vanguard Small Cap Index fund, which gained 13.0%, and the DFA US Micro Cap Index fund, which is up 11.2%. The Model Shadow Stock Portfolio has a compound annual return of 17.5% from its inception in 1993, while the Vanguard Total Stock Market Index fund (VTSMX) has gained 8.7% annually over the same period.
The Model Fund Portfolio was up 1.1% for April. This compares to a 1.7% gain for the Vanguard Total Stock Market Index fund (VTSMX). Year-to-date, the Model Fund Portfolio has now gained 11.3%, compared to 12.9% for the Vanguard Total Stock Market Index fund. The Model Fund Portfolio has a compound annual return of 8.8% from its inception in June of 2003, while the Vanguard Total Stock Market Index fund has gained 8.0% annually over the same time period.
NEW THIS MONTH
There were no transactions in either of the Model Portfolios during the month of April.