Building a diversified portfolio is a snap with a world allocation fund. These funds, including
T. Rowe Price Global Allocation (RPGAX), invest in a mix of stocks and bonds across the globe. We view the fund as a core holding, says Charles Shriver, one of the fund s two managers. It s a one-stop shop.
Shriver and his co-manager, Toby Thompson, make the big-picture calls of how to position the portfolio. They start with a target of 60% U.S. and foreign stocks, 29% U.S. and foreign bonds, and 11% alternative investments, then tilt the fund toward certain asset classes – large- versus small-company stocks, say, or growth versus value, or emerging-markets versus developed-world stocks or bonds – depending on their view of the world.
These Bond Funds Might Offer Juicy Yields, and Unwelcome Surprises
Unconstrained bond funds can invest in just about anything, sometimes even stock, so good luck figuring out exactly where they put your money.
The 10-year Treasury is currently paying about 1 percent.Credit.Erin Schaff/The New York Times
By Tim Gray
Jan. 14, 2021
Investing in a so-called unconstrained bond fund is like that team-building exercise where you fall backward into someone’s arms: It can work, but it requires a lot of trust.
These funds prospect far more widely for their holdings than a typical core bond offering that might anchor a portfolio. They usually can buy bonds regardless of credit quality or country of issue. Often, they can also scoop up currencies, derivative and convertible securities, and even stock.