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I'm curious why you believe that OAKBX is any more volatile than DODBX ? I look at all those funds mentioned the same way - All have a flexible mandate. Personally, I look at OAKBX as having a cash cushion against market declines. It has done very well for investors over the long term.
Also, they have hired several new managers that will be helping with the bond sleeve ( I believe one of these managers ran a bond portfolio before. ) Anyhow, my core funds are OAKBX, PRWCX, and FPACX.
Dear California: Question, how many moderate allocation does it take to be diversified ? Do you really need four moderate allocation funds ? All of the funds you mentioned are outstanding, but when push comes to shove, I keep DODBX and sell the other three. Regards, Ted
I have to agree with Ted....I won't try and recommend one over the other, but I don't really see any reason to own four moderate allocation funds. Maybe two at the most.
In honor of St. Valentine ... You loved this fund once. What swayed your affections?
You did your research I assume? Decided the fund was appropriate for your needs and was being generally well run? And the fees looked reasonable? You mailed in your hard-earned cash or agreed to payroll withholding. Those decisions are not taken lightly. If you did all that well, I'd say you don't have much to worry about. All funds go through periods of overperformance and underperformance. These periods can and do last for years. However, after 10, 12, 15 years it's very likely the results among the funds you cite will look remarkably similar.
And with all due respect to Ted and others ... for most investors the number of funds owned is in itself of little consequence. Yes, it may lead to higher transaction or maintenance costs. In addition, having a lot of funds can be time consuming and potentially confusing for you. Some also express concern that with so many different funds in your portfolio they might end up off-setting each other (in effect "fighting" one another) due to their different holdings.
Really? Let's think of it this way: Would you have earned more at the end of a specific time frame (you name it) having had all your money in a single fund that gained 15% over the period --- OR having had your money spread out among 5 different funds, each of which each gained 15% over the same period? Answer: Your "net gain" is still going to be 15%.
I don't know much about who manages the bonds at Oakmark. The funds are a division of Chicago's Harris Associates and the company has an impressive long term track record in managing investor assets. So, I'd try to find something else to worry about.
Reply to @hank: An Chicago institution, now owned by the Bank Of Montreal, thus BMO Harris Bank, but it still has its friendly lion Hubert. Regards, Ted
However, a large number of similar funds CAN be a symptom of poor portfolio construction or an ad hoc kitchen sink strategy (i.e. fundaholic strategy). This might imply a poor overall portfolio allocation and in the worst case lead to performance chasing churn/allocation resulting in poor investor returns in the funds that is less than individual fund returns.
A well constructed portfolio seldom needs multiple similar funds. Some think of it as diversifying to reduce manager/strategy risk. This is more valid when using high risk funds/strategies that are not too correlated with each other than when using the relatively sedate allocation funds like these.
Uhh, personally I think the managers of all 4 funds are quite talented. They all ply something of a value discipline (I.e. It's not like he's investing in balanced funds covering all four corners of the style box). If all 4 management teams agreed on a pick, I wouldn't mind that being overweighted. Why not own all four funds? Well, given that you spend enough time monitoring mutual funds to be posting to this board
I like all these funds, own or have owned them, like JABAX (a fine fine fund that gets no love in this forum, at least that I have seen), ICMBX, and GLRBX in addition, but must point out that the more you own the closer you come to duplicating the performance of AOR and/or AOM, pure and simple.
Reply to @Ted: Then why bring up "Bank of Montreal" and "BMO Harris" --- what was the point or meaning of this statement if you know that BMO Harris and their Friendly Lion has nothing to do with Harris Associates? ... "An Chicago institution, now owned by the Bank Of Montreal, thus BMO Harris Bank, but it still has its friendly lion Hubert."
By the way, Boeing, Bruce Fund, RiverNorth Funds, Hyatt, Harris Hall & Co., Hertz are also located in Chicago. Chicago Bulls aren't doing all that well but they still have their friendly and entertaining Benny The Bull mascot as well as the Luvabulls dancers.
Reply to @Kenster1_GlobalValue: You'll need to retake Investing In Chicago Mutual Funds 100. You forgot Ariel, Nuveen, Perritt, Keeley, & Harbor Mutual Funds.. Regards, Ted P.S. The Blackhawks are the only thing we got going for ourselves.
Comments
Also, they have hired several new managers that will be helping with the bond sleeve ( I believe one of these managers ran a bond portfolio before. ) Anyhow, my core funds are OAKBX, PRWCX, and FPACX.
Regards,
Ted
P.S. Welcome To The MFO Discussion Board
California Here I Come: Huell Howser
Just years ago - this was the most highly decorated, highly recommended, sleep-well-at-night bedrock of a Balanced mutual fund.
You did your research I assume? Decided the fund was appropriate for your needs and was being generally well run? And the fees looked reasonable? You mailed in your hard-earned cash or agreed to payroll withholding. Those decisions are not taken lightly. If you did all that well, I'd say you don't have much to worry about. All funds go through periods of overperformance and underperformance. These periods can and do last for years. However, after 10, 12, 15 years it's very likely the results among the funds you cite will look remarkably similar.
And with all due respect to Ted and others ... for most investors the number of funds owned is in itself of little consequence. Yes, it may lead to higher transaction or maintenance costs. In addition, having a lot of funds can be time consuming and potentially confusing for you. Some also express concern that with so many different funds in your portfolio they might end up off-setting each other (in effect "fighting" one another) due to their different holdings.
Really? Let's think of it this way: Would you have earned more at the end of a specific time frame (you name it) having had all your money in a single fund that gained 15% over the period --- OR having had your money spread out among 5 different funds, each of which each gained 15% over the same period? Answer: Your "net gain" is still going to be 15%.
I don't know much about who manages the bonds at Oakmark. The funds are a division of Chicago's Harris Associates and the company has an impressive long term track record in managing investor assets. So, I'd try to find something else to worry about.
Regards,
Ted
Hubert The Harris Lion:
However, a large number of similar funds CAN be a symptom of poor portfolio construction or an ad hoc kitchen sink strategy (i.e. fundaholic strategy). This might imply a poor overall portfolio allocation and in the worst case lead to performance chasing churn/allocation resulting in poor investor returns in the funds that is less than individual fund returns.
A well constructed portfolio seldom needs multiple similar funds. Some think of it as diversifying to reduce manager/strategy risk. This is more valid when using high risk funds/strategies that are not too correlated with each other than when using the relatively sedate allocation funds like these.
Harris Bank BMO is not related to Harris Associates, although both have Chicago roots.
Harris Bank (of Chicago) was founded in 1907 (about when that cartoonish ad was designed:-) and is currently owned by BMO of Canada.https://en.wikipedia.org/wiki/BMO_Harris_Bank
Harris Associates (of Chicago), which operate The Oakmark Funds, was founded in 1976 and is currently owned by Natixis of France. https://en.wikipedia.org/wiki/Harris_Associates
BMO does, however, operate its own line of mutual funds: http://www.bmo.com/home/personal/banking/investments/mutual-funds/funds
Regards,
Ted
By the way, Boeing, Bruce Fund, RiverNorth Funds, Hyatt, Harris Hall & Co., Hertz are also located in Chicago. Chicago Bulls aren't doing all that well but they still have their friendly and entertaining Benny The Bull mascot as well as the Luvabulls dancers.
Regards,
Ted
P.S. The Blackhawks are the only thing we got going for ourselves.
Chicago: Frank Sinatra