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Charts: How tactical allocation funds missed their chance (@MstarAdvisor)
Investors seem to like the idea of tactical allocation funds. In 2011, they poured more than $10 billion into the funds, which make rapid shifts in and out of asset classes depending on market trends and economic conditions. Investors hope that they are buying competitive returns with a smoother ride in these topsy-turvy times. But as Jeffrey Ptak illustrates in the following charts (and in his article “Tactical Funds Miss Their Chance”), tactical funds have mostly failed to live up to expectations. Their risk-adjusted performance, for the most part, was lower than that of a traditional balanced index fund.
During the market’s sharp decline last summer, about 60% of tactical funds had steeper drawdowns than that of the Vanguard Balanced Fund.
Since the financial crisis, only 14 tactical funds (out of 81) have lower downside-capture ratios than Vanguard Balanced.
Finally, Ptak wanted to see if adding a slice of tactical funds to a portfolio would make the it more efficient. Only one third of the time over rolling three-year periods in the past decade did an allocation to an average tactical fund produce better risk-adjusted returns than did Vanguard Balanced.
Omnivore in practice, but a vegetarian at heart
I eat what is available. But honestly if it’s not a fruit/veggie the sight of it usually makes me gag.
That’s why when I end up living on my own that’s pretty much all I’ll be buying to consume, plus vitamin supplements.
Also since I’m lactose intolerant it’ll be more in my favor :3