Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:As Bond Panic Continues, Investors Flock to 60-40 Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, June 28, 2013

As Bond Panic Continues, Investors Flock to 60-40

News summary by MFWire's editors

InvestmentNews' Jason Kephart writes about the popularity of the classic 60/40 portfolio by pointing out that the $19 billion Vanguard Balanced Index Fund [profile] has been up 5.48 percent this year through June 24. Vanguard's fund is 60 percent U.S. stock market and 40 percent Barclays U.S. Aggregate Bond Index.

Kephart said that risk parity funds, which assume the risk in a portfolio comes from stocks and lower stock allocation, are designed to achieve the same returns with less risk, are underwater. The portfolio levers bonds to get those returns but Fed concerns over interest rates have scared investors from portfolios heavy with bonds. Invesco Balanced-Risk Allocation Fund is down 4.89 percent.

Some critics of the 60/40 portfolio say that it won't protect investors from risk, however. Harry Merriken chief investment strategist at Gateway Investment Advisers[profile] pointed out that investors should have learned that most asset classes are correlated in 2008 when classic diversification models failed. That correlation exposes stocks to bond risks and vice versa. He suggests alternative funds as a method of diversifying without going the old school route.

Morningstar's alternative-funds research director, Nadia Papagiannis, said advisers are "piling into" to alternative funds.

To read more, click here, here and here

Edited by: Casey Quinlan


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2020: Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2020
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use