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  • msf June 2019
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mbeax fund

I am thinking of selling btbfx fund and buying mbeax fund. My thinking is mbeax may be lower risk.all opinions would be appreciated.


  • I'm not clear on your objectives here - dialing down risk by shifting from equities to bonds with a less aggressive hybrid fund, while simultaneously dialing up risk by shifting from MMF to an intermediate term bond fund (ftbfx thread). As I noted in that thread, bonds may be overpriced now.

    With respect to MBEAX, I almost always use VWELX as my gold standard. If I'm looking at funds in the moderate allocation space, I want to hear a reason why another fund is considered better for a portfolio. For example, it might have less risk. Here though, despite MBEAX's higher allocation to bonds (50% vs. 40% for VWELX), M* rates the risk level of two funds average over the past three and five years.

    MBEAX's performance has been either top quartile or bottom quartile in eight of the last ten calendar years, plus 2019 YTD. Except for 2009 and 2010, VWELX has been in the top two quintiles (40th percentile or better) every calendar year in the past decade, and 2019 YTD also. The more erratic relative performance of MBEAX could be indicative of a unique or at least distinctive strategy, or of a fund thrashing around in search of a theme. It would be worth looking into the explanation.

    Since you're looking into bond funds, and BTBFX looks like a fine aggressive allocation fund, you might dial back your risk by selling some of the BTBFX and buying a good bond fund to adjust to your new target allocation instead of doing a straight swap into a moderate allocation fund.

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