Asset diversification is the name of the game this week. With $55.1 billion in net assets and 985 holdings, the Blackrock Global Allocation Fund offers investors access to global equity and bond markets with an 18% cash cushion. An opportunistic approach, this fund has a 75% turnover rate, and 9.7% of its portfolio value is in its top 10 holdings.
Inside the Fund
Type of Fund
This fund is an open-ended retail mutual fund with a $1,000 minimum investment requirement for both standard and IRA accounts.
Dan Chamby co-manages the fund and is a CFA charter holder. Previously employed with Merrill Lynch Investment Management and Fujitsu in Japan, Chamby’s global experience is invaluable. He has also worked in credit and money market roles at Bank of New York Mellon.
MDLOX’s year-to-date performance is 4.4%, which puts the fund in the 1st quintile for the category. This is a rise from the previous year’s performance numbers where the fund sat in the 5th quintile. In 2012 and 2013, the fund posted double digit returns.
The fund is not an income vehicle, with a conservative dividend yield of 0.3% and a semi-annual payment frequency. Payment months are July and December.
Asset Allocation Weightings
The attractiveness of this fund is its diversified approach to asset allocation. Current weightings are:
- 56.19% Stocks
- 19.82% Bonds
- 18.27% Cash
- 2.76% Other
- 1.56% Preferred Stocks
- 1.41% Convertible Bonds
Portfolio Sector Weightings
Relatively balanced across all sectors, the Blackrock fund sits in the 3rd and 4th quintiles for most of its equity weightings.
Top 10 Holdings
The top holdings for the fund are made of a combination of bonds, preferential and common stock. There is no weighting over 1.7% with the fund holding U.S., Australian, British, Italian and Mexican government debt.
The primary concern of the fund is the exposure to Italy debt. Current developments in Greece could affect debt markets globally. On the equity side, the fund has a 4.57% basic materials weighting, which could influence overall performance.
The Bottom Line
The Blackrock Global Allocation Fund (MDLOX) has an alternative approach to investment with the ability to invest across a wide range of asset classes and emerging sectors. The expense ratio of 1.13%, however, puts the fund in the expensive bracket and the 5th quintile for its category. This should be taken into account.