Recent Gurus' Asset Allocations
With summer fading away, we now suddenly find ourselves in September, one of the worst months for the stock market. It is thus a good time to check up your portfolio and make necessary adjustments if it is necessary.
In the previous article, we introduced ValidFi's Guru Asset Allocation Watch and strategies. The Guru Asset Allocation Clone strategy applies ValidFi's proprietary algorithm to detect a mutual fund's asset exposure and utilizes the derived information to make necessary asset allocation decision for each month. The risk adjusted performance of the strategy is fairly impressive for the past ten years. Readers could examine one of its model portfolios for more information.
The portfolio recently made a noticeable asset allocation change on August 31st. 2009. The following table compares its August and September allocations (notice that the funds used to represent the asset classes could be replaced by ETFs such as SPY, EFA, IYR, TIP, CIU or CFT, BWX, EEM, HYG or JNK and BND or AGG).
From the above table, the most noticeable changes are:
Let us further examine the recent allocation moves for several top performing allocation funds.
The following picture illustrates Vanguard Wellesley Income Fund (VWINX). We could see the fund made noticeable reduction in equity exposure during August.
The other top allocation fund, GMO Benchmark-Free Allocation GBMFX has the following allocation trend:
Again, the fund made equity reduction during the August time frame.
Readers are encouraged to take advantage of the ValidFi's Real Time Asset Allocation tool to find out asset allocation trends of your favorite funds. It is free but requires a registration during its Beta testing period.
To summarize, several great asset allocation investors have made a very defensive move. Even if you don't want to change your asset allocation right now, it pays to keep an eye on this.
In the previous article, we introduced ValidFi's Guru Asset Allocation Watch and strategies. The Guru Asset Allocation Clone strategy applies ValidFi's proprietary algorithm to detect a mutual fund's asset exposure and utilizes the derived information to make necessary asset allocation decision for each month. The risk adjusted performance of the strategy is fairly impressive for the past ten years. Readers could examine one of its model portfolios for more information.
The portfolio recently made a noticeable asset allocation change on August 31st. 2009. The following table compares its August and September allocations (notice that the funds used to represent the asset classes could be replaced by ETFs such as SPY, EFA, IYR, TIP, CIU or CFT, BWX, EEM, HYG or JNK and BND or AGG).
| Asset | August Allocation | September Allocation |
| VBMFX | 0.00% | 0.00% |
| VFISX | 20.47% | 0.00% |
| VWEHX | 0.56% | 2.31% |
| VEIEX | 3.50% | 5.08% |
| TGBAX | 10.25% | 0.00% |
| VFICX | 15.09% | 46.52% |
| VIPSX | 10.80% | 27.98% |
| VGSIX | 0.03% | 0.06% |
| GLD | 0.00% | 0.00% |
| VGTSX | 2.96% | 1.96% |
| VFINX | 36.34% | 16.08% |
| Stock Exposure | 42.83% | 23.18% |
From the above table, the most noticeable changes are:
- Total stock exposure: reduced from 42.83% to 23.18%
- Fixed income allocation: big increase to Investment Grade Corporate Bond (VFICX) and Inflation Protected Treasury Bond (VIPSX)
Let us further examine the recent allocation moves for several top performing allocation funds.
The following picture illustrates Vanguard Wellesley Income Fund (VWINX). We could see the fund made noticeable reduction in equity exposure during August.
The other top allocation fund, GMO Benchmark-Free Allocation GBMFX has the following allocation trend:
Again, the fund made equity reduction during the August time frame.
Readers are encouraged to take advantage of the ValidFi's Real Time Asset Allocation tool to find out asset allocation trends of your favorite funds. It is free but requires a registration during its Beta testing period.
To summarize, several great asset allocation investors have made a very defensive move. Even if you don't want to change your asset allocation right now, it pays to keep an eye on this.
Labels: BWX, CFT, CIU, DBC, EEM, EFA, GLD, HYG, IWM, IWN, IYR, JNK, LQD, MDY, PCY, QQQQ, SHY, SPY, TIP, TLT
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