Where Moderate Allocation Funds Are Putting Their Money

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Includes: AGG, BND, CIU, CSJ, DBA, DBC, EEM, EFA, GSG, HYG, ICF, IEF, IWM, IYR, JNK, LQD, MBB, MDY, MUB, PHB, QQQ, SHV, SHY, SPY, TLT, USO, VEU, VNQ, VWO
by: MyPlanIQ

We are initiating coverage of where moderate allocation funds are putting their money. This will give an indication of whether fund managers are being more conservative or aggressive this week.

We track two separate indicators:

  1. We review and assign the top 3 Moderate Allocation Funds. We then track their exposure to fixed income and risk based assets. This is calculated weekly and covers the last one year.

  2. We then aggregate the exposure to fixed income and risk based assets of all Moderate Allocation Funds. It is calculated weekly and covers the last one year.

click to enlarge

We can see some big variations over the past year and considerable recent volatility. We can see the impact of QE2 driving equities up and then the weakness towards the end of the weak as most indices fell. There would be a more defensive move to fixed income assets.

At this point, the balance is marginally defensive.

The aggregate group is not reacting to the changes -- the moderate portfolios have become slightly more aggressive. This may change if the current sentiment continues.

Disclosure: No positions