Tactical Asset Allocation
Tactical Asset Allocation Funds
Tactical asset allocation funds allow managers to shift their asset mix; the goal is to exploit the market’s strong periods while avoiding its weaker periods. According to Morningstar, there were > 40 such funds as of September 2013. The track record of these funds has consistently lagged returns from a balanced portfolio (60% S&P 500 + 40% Barclays Aggregate Bond Index).
Tactical Asset Allocation Funds vs. Balanced Portfolio
[Morningstar data through Aug. 31, 2013]
|
Annualized |
T.A. Funds |
Balanced |
|
1 year |
6% |
10% |
|
3 years |
8% |
12% |
|
5 years |
4% |
7% |
|
10 years |
5% |
6% |