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
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.
Kevin
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 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)
...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.
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.
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.
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.