Balanced Managed Sector Needs More Balance

The funds in this peer group haven't done as much to protect investor assets as one might think. Plus, two picks to consider.

Christopher J. Traulsen, CFA 1 October, 2008 | 10:56AM
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Funds in the IMA's "Balanced Managed" sector are permitted to have up to 85% in equities, making the sector name something of a misnomer. The impact of this can be clearly seen by looking at performance. The FTSE All Share ex-Investment Trust lost 23.7% from 1 July 2007 through 30 September 2008, and only a handful of sector offerings suffered larger drops in the period. Fair enough--balanced funds should lose less given that they're not all equity and given that the All Share came into the crisis with a heavy financial services weight. In other words, it was an easy benchmark for a multi-asset fund to beat in the downturn.

If we take two truly balanced strategies and compare them to the sector, a different picture emerges. A composite index made up of 50% MSCI World and 50% Lehman Ste

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BNY Mellon Mlt-Asst Balanced GBP Inc241.10 GBP0.02Rating
Jupiter Merlin Balanced Portfolio L Acc227.61 GBP0.31Rating

About Author

Christopher J. Traulsen, CFA  is director of fund research, Europe and Asia, Morningstar.

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