 |
Vanguard ETF: |  |
7.4%* |
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Diversified Core: | |
8.1%* |
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Six Core Asset ETFs: | |
7.3%* |
Articles on ICFI
- Asset Allocation: Focus Risk on Long Duration Bonds
01/14/2011
Our smart money indicator reports funds' aggregate asset exposure to U.S. equities and bonds. It is derived based on comprehensive analysis of top asset allocation gurus' recent asset exposure. We track two separate indicators:
- Top 3 Moderate Allocation Funds (Smart Money)
- 481 Moderate Asset Allocation Mutual Funds (Pro Money)
This is calculated weekly and the chart covers the last one year. For the week ending 1/7/2010, our proprietary model reported equity exposure for the two set of funds was 73% and 65%, respectively.
Top 3 Moderate Allocation Funds (Smart Money)
481 Moderate Asset Allocation Mutual Funds (Pro Money)
(Click to enlarge)The theme remained largely unchanged last week - investor appetite for equity continued to stabilize and was driving inflow into the stock market. Improved economic data continued to feed positive sentiment in the equity market.
As we pointed out in last week’s article, the low-interest-rate environment will not last for long and the Fed won’t be able to keep subsidizing borrowers at the expense of savers. Investors need to pay particular attention to duration when allocating their portfolios to fixed-income securities. With rising interest rate expectation in the medium term, bonds with shorter maturities should be a better bet.
labels:investment,
Symbols:AGG,BBND,CIU,EEM,EFA,GSG,HYG,ICFI,IEF,IWM,IYR,JNK,MBB,MDY,MUB,PHB,QQQQ,SHV,SHY,SPY,TLT,VEU,VNQ,VWO,
- Inflation Prospects to Pressure Bonds Soon?
01/07/2011
Our smart money indicator reports funds' aggregate asset exposure to U.S. equities and bonds. It is derived based on comprehensive analysis of the top asset allocation Gurus' recent asset exposure. We track two separate indicators:
- Top 3 Moderate Allocation Funds (Smart Money)
- 481 Moderate Asset Allocation Mutual Funds (Pro Money)
This is calculated weekly, and the chart covers the last one year. For the week ending 12/31/2010, our proprietary model reported equity exposure for the two set of funds was 77% and 66%, respectively.
Trends for the Top 3 Moderate Allocation Funds (Smart Money)
481 Moderate Asset Allocation Mutual Funds (Pro Money)
click to enlarge chartsTwo weeks ago, we saw that the continued stabilization of investor appetite for equity was driving inflow into the stock market. This trend remained little changed last week as improved economic data continued to feed positive sentiment.
Rising interest rates will hurt fixed-income assets, and this trend of funds pulling out of bonds and being in favor of stocks is not surprising as many investors believe that the low-interest-rate environment will not last for too long. Some economists are predicting that the U.S. economy will grow at a rate close to 4% for the next two years. Inflation expectations are bound to rise and the Fed won’t be able to keep subsidizing borrowers at the expense of savers forever. Bond investor Bill Gross has recently suggested the end of the bull bond market may be at hand. Warren Buffett also echoed a similar viewpoint, indicating “short-term and long-term bonds are a very poor investment at the present time”.
That said, not all the doubts about the direction of the economy are completely removed yet, and the Fed’s own predictions are that the unemployment rate will stay in the 9%+ range for all of 2011. It’s hard to see the Fed would begin any credible discussion about raising rates until we see some meaningful downward movements in the unemployment figures.
labels:investment,
Symbols:AGG,BBND,CIU,EEM,EFA,GSG,HYG,ICFI,IEF,IWM,IYR,JNK,MBB,MDY,MUB,PHB,QQQQ,SHV,SHY,SPY,TLT,VEU,VNQ,VWO,
- Smart Money Trend: Bonds Retreat, Equities Edge Back
12/30/2010
Our smart money indicator is based on comprehensive analysis of the top asset allocation Gurus' recent asset exposure. Currently, it tracks the aggregate asset exposure to U.S. equities and bonds.
We track two separate indicators:
This is calculated weekly and covers the last one year. For the week ending 12/10/2010, our proprietary model reported the equity exposure of the Top 3 Funds was 78% and 67% for the 481 Moderate Asset Allocation Mutual Funds.
Trends for the Top 3 Moderate Allocation Funds (Smart Money)
click to enlarge charts
481 Moderate Asset Allocation Mutual Funds (Pro Money)
Two weeks ago, we saw that the desire for capital preservation prompted funds to tweak asset allocation to fixed income. In contrast, last week, funds were pulling out of bonds and in favor of stocks. With the stock market rallying to pre-Lehman levels, we are starting to see more fund flows that are driven by returns chasing. It remains unclear whether this is the beginning of a secular trend towards a more bullish outlook on the stock market and the 30-year-old bull market in bonds coming to an end.
Bond investor Bill Gross also signaled recently that the end of the bull bond market may be at hand and PIMCO is “expanding its guidelines so it will be able to invest up to 10 percent of its total asserts in preferred stock, convertible securities and other equity-linked securities.”
labels:investment,
Symbols:AGG,BBND,CIU,EEM,EFA,GSG,HYG,ICFI,IEF,IWM,IYR,JNK,MBB,MDY,MUB,PHB,QQQQ,SHV,SHY,SPY,TLT,VEU,VNQ,VWO,
- Smart Money Trend: Capital Preservation Driving Market Flows
12/23/2010
Monitoring where asset allocation funds are putting their money gives an indication of whether fund managers are being more conservative or aggressive this week. MyPlanIQ's smart money indicator is derived based on comprehensive analysis of top asset allocation Gurus' recent asset exposure. Currently, it tracks the aggregate asset exposure to U.S. equities and bonds.
We track two separate indicators:- Top 3 Moderate Allocation Funds (Smart Money)
- 481 Moderate Asset Allocation Mutual Funds (Pro Money)
This is calculated weekly and covers the last one year. For the week ending 12/10/2010, our proprietary model reported the equity exposure of the Top 3 Funds was 50.4% and 66.4% for the 481 Moderate Asset Allocation Mutual Funds.
Trends for the Top 3 Moderate Allocation Funds (Smart Money)
481 Moderate Asset Allocation Mutual Funds (Pro Money)
Two weeks ago, we saw that falling bond values have caused investors to build up an overweight in equities. This past week, money managers were again tweaking asset allocations to the benefit of the perceived safety of fixed income and lowered their equity exposure. We believe the underlying economic force shaping this decrease in the appetite for risky assets has been the desire for capital preservation near year end with no long-term implication.
That said, a more pessimistic but objective view offered by John Hussman paints an alarming picture on the current markets: he characterizes the current states of the markets as "overvalued, overbought, overbullish, rising-yields" and the usual large losses followed.labels:investment,
Symbols:AGG,BBND,CIU,EEM,EFA,GSG,HYG,ICFI,IEF,IWM,IYR,JNK,MBB,MDY,MUB,PHB,QQQQ,SHV,SHY,SPY,TLT,VEU,VNQ,VWO,
- Smart Money Trend: Stocks May be Winners of Bond Turbulence
12/16/2010
Monitoring where asset allocation funds are putting their money gives an indication of whether fund managers are being more conservative or aggressive this week. MyPlanIQ's smart money indicator is derived based on comprehensive analysis of top asset allocation Gurus' recent asset exposure. Currently, it tracks the aggregate asset exposure on US equities and bonds.
We track two separate indicators:This is calculated weekly and covers the last one year. For the week ended on 12/10/2010, equity exposure for the two sets of funds tracked were 60% and 66%, respectively.
Trends for the Top 3 Moderate Allocation Funds (Smart Money)
Aggregation of all Moderate Allocation Funds
As interest rates have moved higher, devaluing fixed-income securities, there is a sign of an asset allocation shift – falling bond values have caused investors to build up an overweight in equities. Benchmark 10-year note’s yield has jumped in part on growing optimism about the economy and on signs that growth could accelerate in 2011.
Although we have seen a rotation out of equities into fixed income consistently over the four weeks, it still remains unclear whether this trend will continue – after all, there will be a level where the higher yields start to threaten the positive momentum in the stock market.
Looking ahead to 2011, with recent clarity on future taxes and more signs that the economy is on a solid footing with improving economic data and stronger corporate earnings, equities can be propelled even further, driving more inflow into the equity market.labels:investment,
Symbols:AGG,BBND,CIU,EEM,EFA,GSG,HYG,ICFI,IEF,IWM,IYR,JNK,MBB,MDY,MUB,PHB,QQQQ,SHV,SHY,SPY,TLT,VEU,VNQ,VWO,
- The Smart Money’s Appetite for Risk, Rekindled
12/09/2010
