On The Move

Vanguard Dividend Appreciation Index (VDAIX) and Vanguard Dividend Growth (VDIGX) both reentered The Rukeyser 100 this month as income investors chased yield. The Federal Reserve’s program to force down long-term rates will make it more difficult for investors to find meaningful income in the bond markets. That means quality dividend-paying equities should prove enticing once the market’s sell-off subsides. With their holdings of quality dividend-paying stocks, both funds are excellent defensive plays should the economy take a decisive turn for the worse.

Fidelity Select Technology (FSPTX) dropped out of The Rukeyser 100 this month as “risk off” became the dominant trade in the market. The fund tends to be more aggressive than many of its peers, pursuing stocks with relatively high valuations. The fund’s largest holdings are names such as Apple (NSDQ: AAPL), Oracle (NSDQ: ORCL) and Accenture (NYSE: CAN), all of which should continue to benefit from strong corporate spending on technology. While the consumer side of the technology business may be weak, corporate buying remains robust as businesses invest in new technology architecture and productivity enhancement.