The trendsetters on Wall Street say that "Global is the new core." Well, that suits BlackRock's Dan Chamby just fine.
"We are concentrating outside of the U.S.," says Chamby, co-portfolio manager for the $21.7 billion
BlackRock Global Allocation fund, in a
recent Street.com TV interview. "The U.S. consumer has done a heroic job of sustaining growth over the past five years. Now they are tired and we'll soon see if the rest of the world can pick up the slack."
One can certainly not accuse Chamby and his co-managers of slacking on the job. The fund is up 15% year to date, and has returned an average of 17% annually over the past three years, 5 percentage points better than its
benchmark, the Dow Jones Moderate Portfolio.
The fund's mandate is to find the best investment, regardless of asset class. Right now it has 22% of its assets in U.S. stocks, compared with 32% in international equities. On the fixed income side, 21% of the fund is in U.S. bonds and 8% is in international bonds. The remaining 17% is in cash and gold exchange-traded funds.
"The central banks of emerging nations like China and India need to diversify into gold," says Chamby. "They are growing fabulously wealthy and need to protect their currency."
The fund plays close attention to currencies worldwide. Right now, Chamby is partial to emerging Asian markets and currencies such as the Singapore dollar and the South Korean won. He is also betting on the appreciation of the Japanese yen -- a prescient bet thus far.
He says he is currently underweight the U.S. greenback and the British pound, because "their economy is facing similar credit problems as the U.S."
"U.S. economic growth was predicated on cheap financing," says Chamby. "It's a consumer-driven economy and right now it's over-leveraged. But that is coming to a halt as the sources of consumer liquidity -- homes, credit cards -- dry up."
Because the fund is cautious on the U.S. consumer, the bulk of its domestic stock portfolio can be found in large international businesses like
. Chamby says he also likes the rails, including
Burlington Northern Santa Fe
As for U.S. fixed income, he favors TIPS over Treasuries -- 12% of the fund is in the inflation-protected securities, but not necessarily because he sees a recession or rampant inflation on the horizon.
"The fund is about maximizing upside and limiting downside, or in other words, providing equity returns with less risk," says Chamby. "I won't say we are bearish on the U.S., just cautious."
Before joining TheStreet.com, Gregg Greenberg was a writer and segment producer for CNBC's Closing Bell. He previously worked at FleetBoston and Lehman Brothers in their Private Client Services divisions, covering high net-worth individuals and midsize hedge funds. Greenberg attended New York University's School of Business and Economic Reporting. He also has an M.B.A. from Cornell University's Johnson School of Business, and a B.A. in history from Amherst College.