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Are other target date funds changing their weigtings ?
Vanguard announced today that it will increase the international equity and fixed income weightings in several all-in-one funds to enhance global diversification and reduce country-specific investment risk. Thanks for any replies. Derf
Interesting. Thanks to Ted for the link and to Derf for highlighting it.
Here's the key passage:"The Vanguard Group Inc. is beefing up its target date fund lineup with an institutional share class. It is simultaneously making what could be described as a market call with allocation shifts of 10 percentage points to international from domestic stock and bond allocations ..."
Yeah. That's how these smart fund managers do it. No swinging for the fence. Just a gradual nudge in this direction or that. They're playing for singles and doubles. Smart move - but nobody can predict when the payout will come. The long lasting bull in bonds has, I think, surprised just about everyone.
Umm ... Regarding other target date and allocation fund managers. Most I'll bet have shortened bond duration. Price is very good at getting out in front - maybe not in the same way Vanguard did. Their Real Asset Fund (PRAFX) was actually created for in-house use several years before they opened it to the public. They created and ran it for investments by their various allocation funds - including the target date variety. The fund is heavy in real estate and has actually held up well compared to the typical commodities fund recently. It comprises only a small allocation in their fund-of-funds (no more than 10%) but I'm sure they viewed Real Assets as giving them a small edge going forward compared with traditional equity/bond holdings.
Price also opened their Global Allocation fund about 2-3 years ago. Most interesting is its 10% stake in a Blackstone hedge fund. I happen to own and like this fund (RPGAX) and recently shifted a bit from DODBX into it. In a nutshell ... I'll let Blackstone, even with their high fees, roll the dice a bit rather than having that $$ sitting in rate-sensitive bonds. The fund is also a bit unique in that it's a "balanced fund" with a substantial international component.
These fund managers are making calculated bets and making changes in small increments. They have great analytical and research teams and are very patient - unlike some of the better known "market timers" who often crash and burn.
Comments
Regards,
Ted
http://www.investmentnews.com/article/20150226/FREE/150229921/in-rare-move-vanguard-beefs-up-international-exposure-in-target-date
Here's the key passage:"The Vanguard Group Inc. is beefing up its target date fund lineup with an institutional share class. It is simultaneously making what could be described as a market call with allocation shifts of 10 percentage points to international from domestic stock and bond allocations ..."
Yeah. That's how these smart fund managers do it. No swinging for the fence. Just a gradual nudge in this direction or that. They're playing for singles and doubles. Smart move - but nobody can predict when the payout will come. The long lasting bull in bonds has, I think, surprised just about everyone.
Umm ... Regarding other target date and allocation fund managers. Most I'll bet have shortened bond duration. Price is very good at getting out in front - maybe not in the same way Vanguard did. Their Real Asset Fund (PRAFX) was actually created for in-house use several years before they opened it to the public. They created and ran it for investments by their various allocation funds - including the target date variety. The fund is heavy in real estate and has actually held up well compared to the typical commodities fund recently. It comprises only a small allocation in their fund-of-funds (no more than 10%) but I'm sure they viewed Real Assets as giving them a small edge going forward compared with traditional equity/bond holdings.
Price also opened their Global Allocation fund about 2-3 years ago. Most interesting is its 10% stake in a Blackstone hedge fund. I happen to own and like this fund (RPGAX) and recently shifted a bit from DODBX into it. In a nutshell ... I'll let Blackstone, even with their high fees, roll the dice a bit rather than having that $$ sitting in rate-sensitive bonds. The fund is also a bit unique in that it's a "balanced fund" with a substantial international component.
These fund managers are making calculated bets and making changes in small increments. They have great analytical and research teams and are very patient - unlike some of the better known "market timers" who often crash and burn.