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yogibearbull
Valued Contributor

Re: Balanced funds question

@theorist , see   http://performance.morningstar.com/RatingRiskWeb/ratingsRiskDefination.action

"Morningstar Risk Rating
This is a proprietary Morningstar data point. An assessment of the variations in a fund's monthly returns, with an emphasis on downside variations, in comparison to similar funds. In each Morningstar Category, the 10% of funds with the lowest measured risk are described as Low Risk, the next 22.5% Below Average, the middle 35% Average, the next 22.5% Above Average, and the top 10% High. Morningstar Risk is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the fund. Funds with less than three years of performance history are not rated."

YBB
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PatMorgan
Explorer ○

Re: Balanced funds question

William Sharpe described some details of Morningstar's Risk-adjusted Ratings in 1998. It included:

To measure a fund's risk, Morningstar first computes the fund's excess return (ER) for each month by subtracting the return on a short-term Treasury bill from the fund's return. Next, all the positive monthly excess returns are converted to zeros. Finally, a simple mean is taken of the resulting "monthly losses" and the sign reversed to give a positive number Thus:

Risk[i] = - mean[t] ( min[t] [ER[it] , 0] )

Note: in the last line of the quote, "[i]", "[t"], and "[it]" are subscripts "i", "t", and "it" in the source. I could not get the forum software to accept HTML SUB elements.

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Highlighted
yogibearbull
Valued Contributor

Re: Balanced funds question


@PatMorgan wrote:

William Sharpe described some details of Morningstar's Risk-adjusted Ratings in 1998. It included:

To measure a fund's risk, Morningstar first computes the fund's excess return (ER) for each month by subtracting the return on a short-term Treasury bill from the fund's return. Next, all the positive monthly excess returns are converted to zeros. Finally, a simple mean is taken of the resulting "monthly losses" and the sign reversed to give a positive number Thus:

Riski = - meant ( mint [ERit , 0] )


That was 20+ years ago! Is M* doing the same now with its proprietary ratings? Attn @syouth1 .

YBB
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PatMorgan
Explorer ○

Re: Balanced funds question


@yogibearbull wrote:

That was 20+ years ago! Is M* doing the same now with its proprietary ratings? Attn @syouth1 .


I don't know whether M* is doing the calculations the same way now, but the description by William Sharpe includes "an emphasis on downside variations".

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kwk75wi
Explorer ○

Re: Balanced funds question

Mapox may be a good fund but I don't know anything about it.

I'd go with wellington by itself in your 401k.

If the index makes you nervous go with active.

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theorist
Follower ○○○

Re: Balanced funds question

 

Thanks for the educational responses!  

I’d be happier using a risk assessment whose underpinnings I understand theoretically, but I’ll have to take M*s word for it I guess :-).

@kwk75wi :  I am willing to have a good fraction of my retirement accounts in target date funds, I’d just like to diversify with some old fashioned balanced funds.  (This is not fully defendable in a rational sense, but since I can afford the luxury of risking slightly suboptimal returns if they result, it is worth it for my peace of mind.  Anyway based on track record to date, I also would’t get suboptimal returns...)

Unfortunately I cannot use Wellington in my 401k or 457 — I have access to Wellesley (but its too conservative to hold a large fraction of my assets just yet), and Global Wellington (much less track record, but it looks good to me so far for many reasons).  Based on discussions so far — and research I’ve been doing on the side incorporating ideas from comments — I’ll probably use the latter and BALFX in my 457, and keep Fidelity Puritan in a small separate IRA I have.

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kwk75wi
Explorer ○

Theorist

On one hand you have a linker and otoh you have a historical data analyst.

I have a good fund manager(vwiax), I'm listening to who?

Wellington is a good fund manager, vwelx is a good choice.

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theorist
Follower ○○○

Re: Theorist

I think we all agree that VWELX would be a great choice!  I just literally can’t get it in my 457 which is held at Fidelity :-).

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kwk75wi
Explorer ○

Re: Theorist

Good Luck.

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kwk75wi
Explorer ○

Re: Theorist

So why was wellington an option early on in the thread?

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kwk75wi
Explorer ○

Re: Balanced funds question

Hey yogi,

TMI/nonsense???

 Chill out, get a grip  etc.

 

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kwk75wi
Explorer ○

Re: Balanced funds question

Major proprietary data analysis by m*, thanks for nothing yogi.

Just what I need, an analysis by m* endorsed by you/yogi.

i'll stick with vwiax.

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kwk75wi
Explorer ○

Re: Balanced funds question

How much does yogi have in vwinx?

Yogi's a lightweight.

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kwk75wi
Explorer ○

Re: Balanced funds question

I have all my Ira money in vwiax, zero in yogi.

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Community Manager RyanM Community Manager
Community Manager

Re: Balanced funds question


@kwk75wi wrote:

How much does yogi have in vwinx?

Yogi's a lightweight.


This is not the first time you have insulted Yogi. There is absolutely no need for it. 

You are suspended until Monday. Have a nice weekend. 

- RyanM

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arriba
Participant ○○

Re: Balanced funds question


@RyanM wrote:

@kwk75wi wrote:

How much does yogi have in vwinx?

Yogi's a lightweight.


This is not the first time you have insulted Yogi. There is absolutely no need for it. 

You are suspended until Monday. Have a nice weekend. 

- RyanM


Thanks for taking this action Ryan.

theorist
Follower ○○○

Re: Balanced funds question


Back to the main topic of value oriented balanced funds:  another one I was looking at a little bit is OAKBX (Oakmark equity & income).  Does anyone have experience with this fund?

The performance of late isn’t quite up there with others that have come up, but past performance isn’t always an indicator of.... The M* write up makes it sound appealing.  I particularly like the performance in 2008 and the tech crunch, though that is old news,  (The quantitative risk rating isn’t great, but they say in the text that more recently it has also down well in drawdowns, leaving me a bit confused.)

Also, like BALFX and unlike the excellent DODBX, it is available NTF at Fidelity.  (Though I can soak up the $75 fee if necessary, not a big deal if I buy in reasonably large chunks.)  

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racqueteer
Participant ○○○

Re: Balanced funds question

I've held off chiming in, chiefly because I'm unfamiliar with some of the choices being offered.  I WILL say that a couple suggestions have, in the past, been quite strong, but have faultered in recent years.  OAKBX has made some calls which appear to have been simply wrong over the last several years.  MAPOX appears to have simply been in an area which is under pressure; again, for several years.  Does this mean they're due?  Who knows? 

DODBX tends to be a little higher on the equity scale, and be a little more vulnerable to financials (see 2008).  FBALX has been, alternatively, very strong.  JABAX (not mentioned) has been doing quite well.  CBALX is another which hasn't been mentioned.  BUFBX has, I believe, been hurt by its energy/oil exposure, but was also formerly a strong choice.  FPACX, despite its high cost and large cash stake, has done ok and well recently when nothing else was (or so it seemed to me).

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yogibearbull
Valued Contributor

Re: Balanced funds question

@theorist , Oakmark/Harris has strengths in value oriented equities but is weak in bonds. This shows in OAKBX that has historically had high % in Treasuries & cash. After a new bond team a few years ago, it has increased corporates a bit - mostly high-quality. As you can guess, bond portion adds to performance only when Treasuries do well.

It is ironic that the parent also owns bond shop Loomis Sayles but it cannot help Harris.

YBB
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yogibearbull
Valued Contributor

Re: Balanced funds question


@racqueteer wrote:

I've held off chiming in, chiefly because I'm unfamiliar with some of the choices being offered.  I WILL say that a couple suggestions have, in the past, been quite strong, but have faultered in recent years.  OAKBX has made some calls which appear to have been simply wrong over the last several years.  MAPOX appears to have simply been in an area which is under pressure; again, for several years.  Does this mean they're due?  Who knows? 

DODBX tends to be a little higher on the equity scale, and be a little more vulnerable to financials (see 2008).  FBALX has been, alternatively, very strong.  JABAX (not mentioned) has been doing quite well.  CBALX is another which hasn't been mentioned.  BUFBX has, I believe, been hurt by its energy/oil exposure, but was also formerly a strong choice.  FPACX, despite its high cost and large cash stake, has done ok and well recently when nothing else was (or so it seemed to me).


I do like JABAX and it is available NTF at Fido and Schwab. It is also available within Schwab DAF. I limited my comments to the funds mentioned.

YBB
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