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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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Allocation Funds Are Back

Allocation funds are back. Note that they rebound strongly after bad quarter(s). They were declared dead prematurely. Twitter LINK.



  • PRWCX/TRAIX down -6.1% YTD 8/19/22, but very happy to have bulk of our investments with the fund.
  • Many stories proclaiming the death of the 60/40 portfolio have been written over the past decade.
    The pundits have been wrong about this.
    It will be interesting to see how this portfolio behaves during the next recession.
    I have a feeling those who claim 60/40 is dead will be proven wrong once again.
  • Roy said:

    PRWCX/TRAIX down -6.1% YTD 8/19/22, but very happy to have bulk of our investments with the fund.

    Same here.
  • But the mixture is quite different in them all. Check DODBX. BRUFX. PRWCX. VLAAX. RPBAX. FBALX. SWOBX. just a few, there.
  • edited August 2022
    Sounds like folks are defining “allocation fund” rather broadly. No problem with that. But tactics employed can vary substantially. I’ve long considered PRWCX closer to being an equity fund. Doubt there’s much limitation there on % equities allowed if a manager wants to ramp up exposure. Might be wrong on that point. No opinion on how good, bad, or promising any of those mentioned look.

    I must say that the destruction in good quality (and some lesser quality) bonds has been extreme this year. One sign of that is that YTD DODBX is ahead of DODIX by about one percentage point despite equity markets having had a down year. While I agree that longer term rates will probably rise, I strongly suspect bonds / bond funds will enjoy a very good stretch (perhaps lasting a year+) in the not too distant future. Just a hunch here from having watched markets the better part of a lifetime.

    Added: If I’m right and bonds / bond funds do recover, it would provide a boost for most allocation funds as well.
  • edited August 2022
    While there are formal definitions for allocation funds, my definition is any mix of stocks, bonds and alternatives. So, that is target-risk funds (static/strategic allocations CA, MA, AA, WA/IB), tactical allocation (TAA with variable allocations), target-date funds (TDFs with glide-paths), multi-asset funds (suddenly touted as new and potential replacement for traditional "balanced"), 529s (age-based glide-paths & others), robo-advisors, and really most personal portfolios. So, when I hear allocation funds are dead, I have to ask, did everybody die? (-:)
  • @hank

    I dunno Mr Hank...I am not an expert for sure but for certain I am not sanguine on bonds

    I anticpated the following possiblities, scenarios and potentially negative for bond holders
    * China, Japan continue to unload US Treasuries
    *In reality, and all political narrative BS aside...inflation continues to go up, product/services continue to go up...gas sure a little cheaper but just wait until after the mid-terms when we replenish strat stock piles at even higher prices
    *Did I mention mid term elections? I did. Wait for it. The cancelation of student debt, so more money to buy weed and shitcoins and sporty event gamblings.
    * Wait for and unlike the prior statement I totally agree with, the discharge of medical debt
    * Wait for it....a complete debt jubilee once the weathy cannot pay the note on their overpriced crappy $675,000 starter homes
    *Who and how is anyone paying on the half empty commercial buildings
    *WAYYY too much debt created over the past dozen years.

    I can see laddering Tbills, 3 month, 6 month, 12 months...but everyting else...dunno, not for me

    To me. Maybe a better allocation funds are the MAFIX, BLNDX...although I am not certain if they are just lucky with their timing, were in OIL/Energy, commodities, FX at the right time? MAFIX maybe better result but more balck boxy than BLDNX? Dunno. Maybe better 50/50 3 month Tbill and solid divy paying value fund, TWEIX like?

    Good Luck to all,

    Baseball Fan
  • edited August 2022
    :) I wasn’t recommending bonds @BaseballFan. I’ve slowly shifted away from bond exposure over the past year or two, favoring equities (both funds and individual holdings) over them. Re bonds - I’m fairly certain you’re right longer term. It would probably take some accidental “overkill” by the Fed in their efforts to slow the economy for bonds to enjoy a temporary rebound. (Roughly only about 15% of portfolio resides in bond funds).

    To replace the modifying / dampening effect of bond exposure in a conservative portfolio, I’ve beefed up exposure to alternatives and am also dabbling in a couple inverse funds. In the case of the latter, the cure might turn out to be worse than the affliction.

    None of this is intended as investment advice of course.
  • PRWCX and DODBX have had notable comparatively strong ytd (and beyond) performance. I have been interested in the meh performance of JABAX, FPACX, FBALX, CBALX (an underappreciated fund, like FBALX and often enough better), and most of all FMSDX, which was an outperformer ... until it wasn't.
  • edited August 2022
    Hello, again.
    I looked at Abbey Capital's Multi-Asset Fund, MAFIX. New to me. Once again, M* screwed up: their OWN website lists minimum entry at $1,000.00 and additional chunks minimum = $1,000.00. M* shows $1M minimum. the numbers look great, actually. but still a rather young fund.
    *Edited to add: MAFIX is EXTREMELY concentrated, looking at the portfolio. (Per M*.). But on Abbey's webpage, I find it quite impossible to FIND the portfolio!

    ...OOPS. That's not a PERIOD. That's a COMMA. It IS actually a $1M minimum to get in. Listen to me giggle as I walk past. ...
  • edited August 2022
    Many variations are fund specific. Moderate-allocation (MA) funds may have many moving parts.

    PRWCX isn't really a moderate-allocation funds (despite its classification as such my M* and others). It is capital-appreciation and has more of HY (65.19%). Also may have unusual positions such as recently in utilities (but top sectors now are tech, healthcare, financials) and long-time position in GE turnaround (#4 holding).

    DODBX had a policy change and is trying shorting and had beginner's luck.

    VWELX also had an untimely policy change away from value into blend/growth just as that was losing momentum.

    FBALX and FPURX have been run hot with growth orientation and higher equity % sometimes approaching aggressive-allocation (AA).
  • A search might show MAFIX has been discussed previously at MFO - unless I am confusing my own research with what I might have read here.
  • edited August 2022
    MAFIX portfolio is under Documentation
    MAFAX and MAFCX have low minimums at $2,500.
  • If you are willing to hold a minimum of $250,000 directly with TRP, you can gain access to PRWCX via their Summit Program.
  • edited August 2022
    What I find somewhat unsettling about MAFIX is Appendix A for "Monthly Returns" on page 46 (or page "A-1") of this:
    For a fund that is supposed to be defensive, that 2008 number doesn't make me feel it can be a good diversifier, although it has, admittedly, worked of late.
  • stayCalm said:

    MAFIX portfolio is under Documentation
    MAFAX and MAFCX have low minimums at $2,500.

    Thanks for the info. But that front-load and E.R. are atrocious. Moving right along.

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