Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

For regular SAA and TAA portfolios, the next re-balance will be on Monday, November 9, 2015. You can also find the re-balance calendar for 2015 on ‘Dashboard‘ page once you log in.

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Please note that we now list the next re-balance date on every portfolio page.

Total Return Bond Fund Review

Fixed income or bond investments are crucial building blocks for portfolios. In general, investing in a intermediate term bond fund such as VBMFX (Vanguard Total Bond Market Index Inv) would be a good choice. However, there are several reasons that one would like to improve over it:

  • First, even though an intermediate term broad base index fund such as VBMFX is relatively safe, it is still not safe enough. For example, since 1990, VBMFX has negative returns in 3 out of the 25 years. What’s more, when interest rates begin to rise, such a fund may encounter more difficulty. See  May 26, 2015: Cash, Bonds and Stocks In A Rising Rate Environment for a discussion in this subject.
  • Second, some actively managed bond funds have consistently outperformed an index bond fund. This is more so in fixed income area, compared with stock investing. Furthermore, bond funds tend to be more trendy: when a fund begins to out perform, it will last for a while. Thus, it is possible to devise a portfolio that can out perform an index fund. 

MyPlanIQ has maintained portfolios that invest in one of the top performing mutual funds managed by managers who have won Morningstar’s Managers of the Year award in fixed income. These mutual funds are either total return bond funds or multi-sector bond funds. Managers of such funds have flexibility to invest in any bond sectors including high yield and emerging market bonds. On Brokerage Investors page, you can find a list of portfolios that are tailored to major brokerages. Notice these portfolios use the low minimum share classes of total return bond funds that have no load and no transaction fees. If your account size can accommodate a higher minimum, you should try to invest in another share class fund that has lower expense ratio. 

You can read more on these portfolios from our newsletter archive or newsletter collection

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