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BUFBX as a Conservative/Moderate Allocation Choice

beebee
edited April 2013 in Fund Discussions
Curious if anyone uses BUFBX as a conservative/moderate allocation choice. It has outperformed the moderate benchmark by 2% over 1,3, and 5 year timeframes. Seems to hold a mix of dividend-paying stocks and high-yield bonds.

From related article:

"To limit risks, consider adding a cautious fund to your portfolio. Top choices include Buffalo Flexible Income (BUFBX), Sierra Core Retirement (SIRAX), and Weitz Balanced (WBALX). The funds hold mixes of stocks and bonds, seeking to protect shareholders in downturns. Most often the cautious approaches have worked. All three funds shined during the turmoil of 2008, and they have outdone the S&P 500 by a wide margin during the past five years. "

safe-funds-that-delivered-winning-returns

Comments

  • ron
    Took a quick look and is a well managed fund but with such high cash 22% I think its a watch and see. If it were me I'd also keep it in cash, why pay them?
  • BobCBobC
    Do not use any of the three funds mentioned. We have used FPACX, TIBIX, PAUIX, and IVAEX as go-anywhere options, since the funds have all had a pretty wide mix of holdings over the years. And each of these have characteristics that might appeal to certain investor types. My only comment on BUFBX is that it has pretty much avoided non-U.S. equities and bonds, which may or may not be a consideration for folks.

    Not sure how SIRAX got into the mix, since it is a multi-sector bond fund. We like the multi-sector bond approach (M* also has a non-traditional bond class, for those funds they cannot figure where to put them). LSBDX, ESIIX, GSZIX, BSIIX, and OSTIX have been good options, and we would use them instead of SIRAX.
  • InvestorInvestor
    Alternatives to BUFBX: GLRBX and VWINX
  • ducrow
    i have owned bufbx for years, it has served me well, do your self a favor and check out mtoix it is a moderate allocation fund. last year it returned 14.82%. ytd it is up 8.64%. and the frosting on the cake is a expense fee of .81%
  • beebee
    edited April 2013
    Reply to @ron:
    Hi ron,

    Regarding cash in a mutual fund...I have heard your argument from others. 22% does seem pretty high though its actual dollar amount might compare to funds in its catagory. PRWCX holds 14% cash but it is 15 Billion dollar AUM...that's more cash than the entire BUFBX fund manages (only 800 million AUM). A certain amount of cash is necessarry to backstop redemptions without having to selling securities.

    Also, as securities appreciate the cash should become a smaller percentage of the overall fund. I'm wondering, in the case of BUFBX, has new money not been deployed into securities? Pimco funds are so large that they have to use deriviaitves to get exposure to their target investments.

    I believe cash has it's place in a fund manager's tool box. With regard to BUFBX...I'm willing to listen to the reason's why.

    BUFBX Quaterly Commentary:
    " Going forward, our cash balance could allow us to be opportunistic
    should the markets show weakness."

    BUFBX_Commentary

    The Dynamic of cash in Mutual funds:
    mutual-fund-cash-levels-what-they-mean/
  • beebee
    Reply to @ducrow:
    Wondering if caps will help highlight your choice...MTOIX
  • Old_JoeOld_Joe
    Reply to @ducrow: Great idea if you happen to have $5,000,000 lying around waiting for something to do with it. Also, availability is "redemptions only".
  • maxlib421
    Reply to Old Joe,
    I was able to place a order through Fidelity for MTOIX for a $75 fee. There does not appear to be a minimum required. The order I tried was only for $1,000 and it was not denied.
  • Old_JoeOld_Joe
    edited April 2013
    Reply to @maxlib421: My info regarding MTOIX was from Schwab. Thanks for your comments... good info is always valuable. Schwab says $5,000,000 to buy in, then $500 for subsequent purchases. That's just crazy!

    How on earth can there be such a difference between brokers? You gotta wonder...
  • ducrow
    the bond portfolio of MTOIX is managed by mackay shields, the global stock portfolio is managed by epoch investment partners. you should google the 2 investment companies. thats what closed the sale for me when i purchased MTOIX a few months ago. by the way you can buy it thru fidelity for low minimums. the .81% managment fee is a bargain for these top notch investment companies.
  • ron
    MTOIX is using a low quality bond portfolio, 50%+ below investment grade and 30% of portfolio are bonds.
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