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PAUDX asset category

LarryH
edited September 2012 in Fund Discussions
I am considering buying PAUDX in an asset allocation portfolio. In what asset category should it be placed?

Domestic equity
International equity
Bonds

1. All of the above because the words "All Asset" appear in the name of this fund.
2. Domestic Equity because it uses the S & P 500 Index as a benchmark.
3. International Equity because it is characterized as World Allocation.
4. Bonds because it consists mainly of TIPS and bonds.

What say ye?

Larry

Comments

  • ron
    all asset, all world. My best guess.
  • scott
    World Allocation.
  • LarryH
    World Allocation: How does this map into the following categories:

    1. Domestic Equities
    2. International Equities
    3. Bonds

    Larry
  • claimui
    edited September 2012
    I put PAUDX / PAUIX in its own category and allocate about 10% to it. To get the 10%, I reduced 5% from my bond allocation and 5% from my stock allocation. My asset allocation without PAUIX was 70/30 (stocks/bonds). I expect PAUIX to be a little more conservative than my overall asset allocation (PAUIX tends to tilt more towards bonds than stocks) so I thought it represented closer to a 50/50 allocation.

    Besides PAUIX, I am also considering other "alternatives" such as long-short, market neutral, etc. If I were to invest in a long-short fund, I might view it as something closer to a 70/30 or 80/20 allocation and take it mostly out of existing stock allocation. Anyway, my approach to these alternative investments is to figure out how much risk/volatility the alternative fund represents, and reduce the existing parts of my asset allocation so that the overall risk profile remains the same.
  • BobCBobC
    We use it as a kind of alternative strategy. It really fits into a sleeve of this we designate Dynamic Allocation. In addition to PAUDX (we use PAUIX), other funds in the Dynamic group would be Ivy Asset Strategy IVAEX, FPA Crescent FPACX, BlackRock Global Allocation MALOX, and IVA Worldwide IVWIX. These all have very flexible investment profiles. Less flexible, but perhaps included in this group is Thornburg Income Builder TIBIX. We allocate about 7-10% to this Dynamic sleeve of our 20-25% alternative total.
  • AndyJ
    edited October 2012
    Reply to @LarryH: If you want to break it up into components to figure your whole portfolio's asset allocation, I'd do it ~ like this (like you probably do with any other allocation fund in your portfolio):

    Jot down the asset allocation for the past 3, 4, 6 months, your choice.
    Average it.
    Use that breakdown in your calculation.
    Recalculate every 3 months or so if desired. (Not a bad idea, because it does change some.)

    Depending on how you categorize, you might need an "other" or something to categorize the commodity positions. Also be aware that he shorts in AA-AA (not in AA).

    Use the Pimco web site to get to the monthly asset allocation spreadsheets. (Middle column, select "Portfolio Statistics.")
  • VintageFreakVintageFreak
    Let's be honest. There needs to be a category called "Manager does WTF he likes". And there would be good reasons to invest in such a fund. PGMDX and PAUDX are such kind of funds.
  • claimui
    Reply to @VintageFreak: That may be an accurate description, but it is not helpful for portfolio allocation purposes. Adding PAUIX to your portfolio means reducing your allocation elsewhere, so you need to consider whether the alternative fund is likely to be conservative or volatile, correlated to equities or market neutral, etc. in order to determine how it fits in your portfolio.
  • Old_Skeet
    edited October 2012
    Hello,

    I have been following the discussion on this subject. I own PASAX which is a sister fund to the topic fund. I have it classified as a specailty fund within my portfolio. In the specality classification I usually hold about four funds (one more than my usual three "duces" per investment category).

    The other three funds that I currently hold in the specality area are CTFAX, Columbia Thermosthat A ... JCRAX, Jefferies Commodity A ... and, LPEFX, Financial Private Equity A. I am looking at dropping one of them and adding Main Stay's Marketfield in the near future. Hey, I may just tuck it in with the rest and expand the area to six funds.

    Have a great day ... and, "Good Investing."

    Skeeter

    Additional Information: Since LPEFX drew interest form one of the Observer's readers I have linked the fund facr sheet below:

    http://www.lpefund.com/documents/pdfs/lpef-lpefx-fs-20120630.pdf
  • BobCBobC
    If you plan to add MFLDX, I would do so in the next few days, while you can still access it. Once the conversion to MainStay occurs, retail investors must buy a new A class version with front-end load. There may be a purchase-at-NAV option with some custodians, but understand the expenses will be higher. And MFLDX in its no-load version will only be accessible via a very high initial amount.
  • scott
    Reply to @Skeeter: LPEFX is interesting in that it isn't just Blackstone and the like from the US, but actually holds a number of the London-listed private equity funds. Certainly not a low-key fund, but I was surprised to see how global it was. I'd seen it before, but never looked more closely.
  • VintageFreakVintageFreak
    Reply to @claimui: Unless I'm mistaken, this fund is not supposed to be an "alternative" or supposed to fit in a portfolio. This fund is supposed to be a complete portfolio.

    Of course, in reality there is no such thing. I mean no one is going to invest simply in "Target 2035" their entire portfolio. It's manager risk. Which is what this is about.

    FAIRX, WGRNX, CGMFX, PVFIX, DEFIX, BULLX, MUHLX, MXXVX, SEQUX, etc., etc., IMHO never "fit" in a portfolio. We are relying - okay gambling - on someone being as good as they, or others claim. Not every fund one owns is about asset allocation.
  • Kaspa
    Reply to @BobC:
    Bought a little MFLDX just for this reason couple of weeks back at Schwab. Not sure if load (or added expense) needs to be paid if I buy more after the conversion to MainStay.
  • BobCBobC
    Word is that existing owners of MFLDX are grandfathered. The load version will have a different ticker.
  • rmt
    edited October 2012
    Just came to know that friday Oct 5th is the last day to buy this fund as a NTF.
  • VintageFreakVintageFreak
    Frankly, you never know if at brokerages such as Schwab, they will let one invest NTF. Has anyone confirmed?
  • VintageFreakVintageFreak
    Reply to @scott: Are we serious? This fund tanked around 70% after its inception !!!
  • TheShadowTheShadow
    edited October 2012
    Not to get to far away from original post, the new Mainstay Prospectus for Mainstay Marketfield fund, dated October 5, 2012:


    http://www.sec.gov/Archives/edgar/data/1469192/000114420412053362/v748260_485apos.htm

  • andrei
    I believe that the Marketfield Fund will become the I shares of this fund, with 2.45% fees...
  • scott
    edited October 2012
    -
  • Kaspa
    Reply to @andrei: If the fees end up being that high, I will sell quickly.
  • scott
    Reply to @VintageFreak: Private equity in general is illiquid, highly risky and volatile. Private equity stocks/etc generally tanked in 2008. I'm not saying it's a good idea for everyone, but just saying that this fund has a much greater scope than I'd expected.
  • VintageFreakVintageFreak
    I have decided to move on from MFLDX and not look back.
  • scott
    edited October 2012
    Reply to @VintageFreak: Why?
  • Mona
    Reply to @Kaspa:

    Kaspa,

    I read the prospectus the same as andrei. MFLDX is Class I, which has the lowest ER of all five classes at 2.45%.

    Mona
  • Kaspa
    Reply to @Mona: Thanks. I will be out as soon as the short-term sell penalty
    period at Schwab is over. That is an atrocious ER.
  • VintageFreakVintageFreak
    edited October 2012
    Reply to @scott: I, Cynic. The fund had enough assets. Good record. Why sell fund? Why to load family? Besides I have allergy to paying load.

    I have TFSMX and TFSHX and AQRNX. Think I'm covered. Then again maybe I buy $100 in my IRA to keep a foot in the door? Hmm....

    PS. Oh yes, I have SARIX but I'm waiting for it to come to PAR value so I can sell the sucker.
  • marlin
    Reply to @Kaspa: They have a fee waiver in place for the Class I shares (for at least the next two years), so the ER of MFLDX Class I shares is/will be 1.56% (read note 2 under the expense table in the prospectus). Still not great, but not quite so atrocious.
  • scott
    Reply to @marlin: And everything that has been put out has said that MFLDX holders will be grandfathered in at current terms. Today was, apparently, the last day to get in before the change.
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