BBALX

golub1

A while back this was a 5 star fund in the balanced category according to Morningstar, now it's a 2 star. As has been pointed out it doesn't fit neatly in this category and is more of a global allocation fund. How do readers feel about this fund? I bought with the idea that it would simplify fund management for my dependents/heirs when I'm gone - one fund covering most of investment categories. I've never made the substantial allocation that I had in mind, but wonder if it is his still one of the best for an all in one or as a companion to PACX which I believe can serve the same purpose.

Ted

Dear golub1: This fund is far from global, 88% of it is U.S. and going from 5 to 2 stars tells you something. This fund is a Turkey that needs to be dumped.
Regards,
Ted













United States 88.4

Canada 2.25

United Kingdom 1.52

Cayman Islands 1.39

Netherlands 1.01

Luxembourg 1.00

Bermuda 0.57

Ireland 0.49

Supranational 0.41

Sweden 0.36

David_Snowball

Hey, golub.

I'll start by noting that the 88% Ted refers to is a breakdown of the fund's bond portfolio, not its stocks nor its overall.

Roughly speaking, the fund is 30% US equity, 30% international equity, 40% fixed-income and cash. That represents substantial overweights in international (13% is average) and fixed-income (32% average). Within equities, it is overweight smaller securities - its median market cap is about one-half of its peer group's. Within international equities, it is overweight emerging markets - 11% of its equities are EM versus 2% for its peers - and Japan.

All of those exposures come from shares of index funds, so problems with the fund's performance are generated by the adviser's asset allocation judgments rather than its security selection. In particular, it receives equity exposure primarily through factor-tilt ETFs; that is, ETFs which are designed to slightly overweight stocks with positive Fama-French attributes. Its indexes are slightly smaller cap and slightly more value oriented than straightforward market-weight indexes.

So, the fund is a poor fit in its category - too international, too emerging, too small, too value. The question is, does that make it a poor fit for your portfolio? I don't know. I do suspect that glancing at a star rating or a relative performance number in isolation and making a knee-jerk reaction (the Mad Money ethos) is probably ill-advised.

For what it's worth,

David

Ted

Reply to @David_Snowball: I stand corrected on fund's asset allocation, however; on a one, three, and five year return bases, compared to the average moderate allocation fund category BBALX is a turkey. If golub is interested in a superior moderate allocation he should look at VILLX.
Regards,
Ted

BBALX vs. VILLX:
http://finance.yahoo.com/echarts?s=BBALX+Interactive#symbol=bbalx;range=1y;compare=villx;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

David_Snowball

Reply to @Ted: You're quite right. Its standard deviation is lower than its peers by about 100 basis points but its returns, over five years, trail by 170.

There are a fair number of solid choices in the group, including Vanguard STAR (VGSTX), F P A Crescent (FPACX), Tributary Balanced (FOBAX) and Buffalo Flexible Income (BUFBX).

David

golub1

Thanks, Ted and David for your comments. I think that Vanguard Star and FPA Crescent or the closest comparables but both are somewhat different. Crescent is far more tactical when it comes to cash, and Star doesn't vary much both in percentages and the funds held. I guess I like the conceptual basis of BBALX. I would have allocations to all the asset classes they use but if I did it myself with additional funds in real estate and high yield, I would be uncomfortable trying to make those calls, Yet I think the idea of tactically allocating assets makes a lot of sense.

ducrow

I Sold BBALX And Purchased Shares In PMARX - Pioneer Multi Asset Real Return Fund - Please Go To Pioneers Web Site And Learn About It - It Might Just Be What You Are Looking For!!!

Ted

Reply to @golub1: From the Pioneer Website !
Regards,
Ted
PMARX: http://us.pioneerinvestments.com/misc/pdfs/brochures/marr_brochure.pdf;jsessionid=414B2B482588D5CF1279B3E88CFF4973.atg01-prd-atg1

golub1

Thanks, I'll check it out

kv968

Or instead of PMARX, you could take a look at iShares All Country Min Vol ETF (ACWV). Not quite the fixed holdings as PMARX but no load or high ER either and comparable (if not better) performance.

Mark

Fidelity offers a global balanced fund, FGBLX, that might be what you'tr looking for.

AndyJ

Blackrock and Allianz also have global allocation funds.

There's also a very interesting, actively managed etf of etfs, GAL, in that space. Last I looked the share volume was a little low for my taste, but if I had an allocation fund portfolio like some people swear by, I'd plan to have it in my portfolio.

ducrow

Reply to @golub1: Fidelity Waives The Load!!!