Gurus' Asset Allocation in the Recent Market Whipsaw
Entering October, one saw the markets trembled a little bit. It's time to review several well known asset allocators' positions.
Top performing asset allocation fund Leuthold Core Investment LCORX (19.4% YTD return up to 10/2/2009) made a noticeable reduction in its equity exposure: from almost 100% to 71%. That is quite significant, even if one takes the recent market drop into consideration. See the following chart:
The other top performing fund Janus Balanced (JABAX) (17.1% YTD return up to 10/2/2009) has been steady after some equity reduction at the end of September: its equity exposure has been around 50%. See the following chart:
Waddell & Reed Asset Strategy Y (WYASX) (17% YTD return up to 10/2/2009) has increased its international equity exposure significantly since early September:
The above is derived from ValidFi's innovative Realtime Asset Allocation (RAA) analysis tool. The actual percentage of allocation might not be that accurate. However, the tool is doing a reasonable job to identify the allocation trend and its change. For the equity exposures mentioned above, we would like to clarify that they represent an estimated Beta correlation with the equity index (represented by Vanguard Total Stock Market Index VTSMX). It does not represent the actual asset allocation but instead represents how close the asset (equity) portion is related to the stock market index VTSMX. For example, a fund could have a 100% Beta on the equity portion but its actual equity allocation is 70%, that would mean that this fund's equity portion's beta is 1.4 (100%/70%).
The takeaway from the above is that we are in a period of uncertainty. In such a period, it is crucial to be consistent with strategies you are using and position your portfolio accordingly.
Top performing asset allocation fund Leuthold Core Investment LCORX (19.4% YTD return up to 10/2/2009) made a noticeable reduction in its equity exposure: from almost 100% to 71%. That is quite significant, even if one takes the recent market drop into consideration. See the following chart:
The other top performing fund Janus Balanced (JABAX) (17.1% YTD return up to 10/2/2009) has been steady after some equity reduction at the end of September: its equity exposure has been around 50%. See the following chart:
Waddell & Reed Asset Strategy Y (WYASX) (17% YTD return up to 10/2/2009) has increased its international equity exposure significantly since early September:
The above is derived from ValidFi's innovative Realtime Asset Allocation (RAA) analysis tool. The actual percentage of allocation might not be that accurate. However, the tool is doing a reasonable job to identify the allocation trend and its change. For the equity exposures mentioned above, we would like to clarify that they represent an estimated Beta correlation with the equity index (represented by Vanguard Total Stock Market Index VTSMX). It does not represent the actual asset allocation but instead represents how close the asset (equity) portion is related to the stock market index VTSMX. For example, a fund could have a 100% Beta on the equity portion but its actual equity allocation is 70%, that would mean that this fund's equity portion's beta is 1.4 (100%/70%).
The takeaway from the above is that we are in a period of uncertainty. In such a period, it is crucial to be consistent with strategies you are using and position your portfolio accordingly.
Labels: BWX, DBC, EEM, EFA, GLD, IYR, SPY, Strategy_544, TIP, TLT
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