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Looking for recc's for alternatives to Blackrock Global Allocation (MCLOX)

To be held in a taxable account. This will be a 5-8 year holding.

Preference is for something that is conservative, but truly global and actively managed with access to the full range of investables and which hedges on foreign currency (if desireable).

Fund is for my wife. She's opted to take a pass on First Eagle's products (I hold FESGX in taxable) because they're a bit higher in terms of risk (vs reward). IVA is closed, and Mutal Shares' lost their top global managers to PIMCO. FPA she holds in her Roth, but to my mind its not truly "global" yet (the international focus seems to be fairly new at FPACX).

Thanks.

Comments

  • what's wrong with blackrock? also, pls note that flexible funds are fairly new and there is no successful formula proven over a long period of time. no matter how flexible or global they call themselves, the sad truth is that they need, at least internally, to create a benchmark and run against it. their risk/reward benchmark is 60/40 -- just no one talks about it. you can create something similar without going through these expensive offerings.
  • Actually, nothing. Just want to make sure I cover all my bases.

    Will probably end up going with MCLOX.

    The reason for going with an all-in-one product is that: (a) it'll be easier to DCA into the portfolio; (b) ostensibly there is a professional and experienced team making the asset + geographic + capitalization decisions rather than myself.

    In principle, with a larger amount of money to invest, yes it probably would be cheaper to construct one's own global portfolio.
  • If you have access to Pimco, you could get into Anne G.'s new Pathfinder fund, or El-Erian et al.'s Global Multi-Asset. (Vanguard brokerage, e.g., has the cheaper inst'l shares for $25k minimum.)
  • The 1.84% expense ratio for MCLOX ($53.4B AUM for all classes) is unconscionable, and I would definitely not buy this class, and actually, any class of this bloated fund which is a laggard in its category. More attractive global allocation funds with much lower AUM and lower expense ratios include: First Eagle Global (SGIIX), Thornburg Investment Income Builder (TIBIX), JPMorgan Income Builder (JNBSX), Principal Global Dividend Income (PGDIX), Marsico Flexible Capital (MFCFX) or Harbor Flexible Capital (HAFLX), and the closed end fund, Nuveen Global Value Opportunities (JGV).

    Kevin

  • I think a fund with as flexible a mandate as the Blackrock fund has can - in theory - take on more money given the amount of various asset classes that can be invested in. However, it's a matter of whether the management can effectively steer a ship that large. I noted in a thread the other week that I wish there were more truly flexible (not just stock/bond global allocation, but stock/bond/commodity and more global funds) allocation funds to choose from than the primaries (such as the Blackrock/Ivy Asset funds.) In an industry where every big thing gets a hundred similar funds devoted to it, there's still not that many funds like the Ivy or Blackrock fund. The new Doubleline Multi-Asset Growth fund may be a compelling option, but there doesn't seem to be much on it yet
  • If you have not already considered Ivy Asset Strategy, I would suggest that you do. It has a very long history, has had the same lead manager forever, and has been one of the few REAL global allocation funds (go anywhere and hedge risk) to have a real history. WASYX is a holding in many of our client accounts. If you look at its long-term record, it is most impressive. BlackRock is certainly another one. Thornburg has some pretty strick guidelines for how a stock or bond fits into the portfolio, and I would not classify it as a true global allocation fund because of that. Hartford has a global allocation fund that we are looking at. It seems to be in the Ivy/BlackRock formula.
  • BobC -- my wife is very risk adverse; she doesn't care if she hits a homerun with this investment (and does not want to take on the risk that might be associated with putting that kind of numbers on the board); she just wants to make a decent return and stay ahead of inflation. She also wouldn't mind getting a bit of yield. In your experience, does Ivy fit this bill?

    MCLOX is huge, no doubt, and part of its robustness during the 2008 crash was due to its bond positions. I've never been comfortable with its size, but rather with its risk aversion. For my wife, its effective limitation to large caps would be a plus.

    Thanks.
  • The Ivy fund is not without risk, certainly (and has been heavy EM in the recent past), but it does have the ability to hedge and has occasionally hedged the fund to some degree in the past shorting index futures on various international markets.

    The Pimco Global Multi-Asset fund turned out to be more vanilla than I would have hoped when it was originally announced, but I would say that is a bit more risk adverse. The Pimco fund would also provide some yield. The Ivy fund may or may not have year-end distributions, but does not offer a consistent yield. Pimco All Asset/All Authority, which has upset some board members with its recent low-key performance, may be worth considering, as manager Rob Arnott is certainly an excellent overall manager and the fund can hedge by taking (I believe) up to a 20% short position (via Pimco's Short Stocks Fund). It's not going to hit home runs, but is a lower risk fund-o'-funds (and can get commodity exposure via exposure to Pimco's Commodity RR fund) that was down about 7% in 2008 (then did 18% in 2009 and 10% in 2010.) That would be a good choice for very risk adverse, and the Pimco AA/AA fund has offered a consistently solid yield. M* lists the yield at 6.37%.

    It all depends on exactly how risk adverse; if very risk adverse and looking for a yield, I would suggest All Asset/All Authority. (PAUDX)
  • Shostakovich you made this comment to BobC:
    ...my wife is very risk adverse; she doesn't care if she hits a homerun with this investment (and does not want to take on the risk that might be associated with putting that kind of numbers on the board); she just wants to make a decent return and stay ahead of inflation.

    Maybe the perfect fund for your risk adverse wife who wants a steady fund that will stay in front of inflation would be PRPFX, Permanent Portfolio. Think about it. It invests in many of the instruments the go-anywhere strategy funds do... except the global part. But it holds steady allocations. Why does it have to be global if the goal is steady, conservative and ahead of inflation? There is no getting away from additionally risk when the fund invests Internationally and in Emerging Markets (which most all global allocation funds do) and gives the manager freedoms to make changes. Just a thought.

    Myself, I like and hold the Ivy Asset Strategy fund, IVAEX. I think someone else mentioned that the management changed for the Ivy fund, but the lead manager Michael Avery has been in place for quite a while - no changes. I also recently bought the Fairholme Allocation fund, FAAFX ,which I expect to be similar.
  • Then one of the IncomeBuilders suggested by kevin, above, should be better then global allocation fund. IB funds have imbedded diversification and yield to protect them. GA funds are attempting market timing - they might not provide yield or even performance if their calls are ill timed. i would not look at the very recent history as a projection for the future for a fund with a very wide mandate.
  • I like the PIMCO All Asset, All Authority idea.
  • Yeah, I mean Ivy has great flexibility and other funds can do all sorts of things, but if the desired product is a low-risk allocation product that has a history of significant yield, then Pimco AA/AA works. It's not going to hit home runs, but it will do consistently okay, deliver a nice yield and has the ability to short.

    I have a bit of Pimco AA/AA, and also use the UK fund Bluecrest Allblue. I also have the Principal Global Div mutual fund, but that's got some risk.
  • Maybe Wintergreen (wgrnx) would interest you. I've held it for three years. The exp. ratio is high tho!
  • Shostakovich, maybe MikeM's suggestion of Permanent Portfolio PRPFX is something to consider. If your spouse is as risk averse as you hint, PRPFX could fit the bill nicely. After all, it owns Treasuries, Swiss francs, gold, silver, and a mix of energy, reits, and growth stocks - quite a diversified mix. And in the 2008 meltdown, it held up as well as any fund.

    I think Ivy Asset Strategy is a darned good option, but it got burned in late 2008. Despite that, it has a tremendous track record. PIMCO AAAA could be ok, but I have never been a fan of funds-of-funds. Thornburg also had a very tough 2008, but it's long-term numbers are pretty good.

    If your wife is more concerned with volatility than long-term numbers, PRPFX might be at the top of the list. Another would be Marketfield MFLDX, which is run by top-notch manager Michael Aronstein, whose ability in the long-short arena is as good as any. It has a $25,000 minimum initial investment.

  • BobC, thanks again for your input.

    Ivy Asset is on the table. Its a fund I've looked at for some time, in fact, lbeit in different roles for my own portfolios.

    I'm thinking my wife's portfolio (which consists mostly of "mad money" -- in spite of which she's still conservatively-oriented) will be split in roughly equal thirds.

    She currently holds Oakmark Global (OAKGX) for raw global equity exposure and will not be adding to this position. This will be the risky part of the portfolio (solid equity fund, but it has its ups and downs; its saving grace is that it recovers fast enough). My wife is willing to accept volatility here.

    She'll hold a more conservative AA core that will generate just a bit of income, perhaps in part via short-duration income securities. This component has yet to be selected. FPA Crescent might be an option here (approx 1.7% yield, payed 2x a year). In terms of tax consequences, we're not terribly concerned about how the income is generated.

    Then the final third will be something that has a bit of a broader mandate and that can more actively hedge against inflation. Here, Ivy Asset is a leading candidate, as is PIMCO All Asset All Authority. I hold First Eagle Global (which someone noted above), but in this context its minimum would be prohibitive. I know that one can't look too much to the past, but Ivy Asset did very well in 2008. The Ivy and PIMCO funds differ in terms of volatility/speculative nature; but that's what we're working with at the moment. I think we're leaning toward PIMCO, but PIMCO's AA/AA C-class shares are exhorbitantly priced (somewhat understandable -- its a fund of funds). I can get the more reasonable D-class shares via my broker, but my wife wants the holding to be entirely in her name, and I support here in that.

    Someone above suggested global dividend stock funds. I've had this thought as well and have looked at some of these for her. The problem is that none are conservative enough (and some, like JPM's, and Princpal's are too new). One that stood out (which my wife owns in her Roth) is Tweedy Browne World Wide High Dividend. She likes it because she likes TB's conservative value-type emphasis (I say "value-type" because TB does not strictly implement their usual "deep value" philosophy with this fund), and does not hedge currencies, but even TBHDX got clobbered during the last downturn. So, that route is out.

    Thanks again for chiming in, all. Many good thoughts and ideas.

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