This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

World Funds Swell as Returns Soar

NEW YORK ( TheStreet) -- At a time when investors have been making withdrawals from stock funds, cash has been pouring into top-performing world-allocation funds.

Ivy Asset Strategy (WASAX) and BlackRock Global Allocation (MDLOX) each have attracted more than $5 billion in new investments this year, according to Morningstar.

Holding a mix of stocks and bonds, the funds gained attention by avoiding the worst losses in market downturns and delivering strong long-term results. During the past five years, Ivy Asset has returned 14% annually, outdoing the S&P 500 Index by 14 percentage points and surpassing 95% of its world-allocation peers. In the same period, BlackRock has returned 8.1%.

The results are intriguing. But before you invest, consider the risks. Both funds place big bets, emphasizing government bonds one year and emerging market stocks the next. That aggressive approach is different from the strategy followed by classic balanced funds, which always keep about 60% of assets in stocks and 40% in high-quality bonds.

Plenty of financial advisers frown on the idea of rapidly shifting allocations. All too often investors buy and sell at the worst times, advisers say. But, most often, BlackRock and Ivy have proved to be deft traders. By putting some assets into one of these allocation funds, you may be able to diversify your portfolio and possibly reduce risk.

Of the two funds, Ivy Asset is the more aggressive choice. The fund can invest in almost anything, including gold, currencies, and stocks and bonds from around the world. When markets look expensive, the managers can shift away from equities entirely or sell stocks short, betting that prices will fall. In late 2008, the Ivy managers dumped stocks, putting 45% of assets in cash. The move helped the fund outperform the S&P 500 by 11 percentage points for the year.
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CVX $77.64 6.23%
IBM $148.54 1.25%
LFC $17.83 7.41%
MSFT $43.90 2.79%
WYNN $78.52 5.69%

Markets

Chart of I:DJI
DOW 16,654.77 +369.26 2.27%
S&P 500 1,987.66 +47.15 2.43%
NASDAQ 4,812.7080 +115.1720 2.45%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs