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How Two Fund Managers Avoided Heavy Losses Thursday

Two fund managers told CNBC Friday that they lost less than 1 percent of net asset value, despite Thursday's 347-point plunge by the Dow Jones Industrial Average.

A defensive stock strategy paid off for Barry James, manager of the James Balanced Golden Rainbow Fund, and Ron Sloan, the chief investment officer of the Invesco U.S. Core Equities Team.

"We were lightly invested in stocks and heavy in Treasurys," said James, adding that his investors were "sitting pretty" and remain in that position today. He said his portfolio had plenty of VXX,* the exchange-traded fund (ETF) for the Market Volatility Index (VIX).

Sloan's holdings were in "health care and other staples," but "we didn't really do much (Thursday)." Sloan added the firm has been waiting all spring for lower prices in industrial and technology stocks and their recent fall may be a buying opportunity.

James, however, said he is "not near a re-entry point" in the stock market. He also recommended buying open-ended funds over ETFs.

* VXX = iPath S&P 500 VIX Short-Term Futures

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Behind Thursday's Tumble:

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CNBC Data Pages:

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CNBC Slideshows:

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CNBC's Companies in the News:

Apple

Cigna

Aetna

Wellpoint

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Disclosures:

Disclosure information was not available for James, Sloan or their companies.

Disclaimer