Trends in Retirement Planning Asset Allocation - Equities Now More Attractive Than Fixed Income

Over the past 5 years retirement planning strategies used by the top asset managers in the world have experienced an increase in equity allocations and have significantly increased exposure to non-traditional asset classes.

The rational conclusions are that asset managers now view equity investments as better values than fixed income investments, and that they are finding additional diversification value in non-traditional asset classes.

Investors doing their own retirement planning should compare their equity and non-traditional asset class exposure to the MarketGlide retirement planning market indexes noted in this article.

Plan Sponsors and advisors that select target date funds should re-examine target date options and determine how the asset allocation compares with the market average.

Copycat Portfolios: Mid Cap Fund Manager's Top Dividend Stocks Yielding 4%

An article in Barron’s this weekend highlights some recent research about the performance of copycat strategies that track and invest in the largest stock holdings of successful fund managers.

Here is a key quote from the research: “A team led by University of Maryland finance professor Russ Wermers reports that you can beat the market by four percentage points a year, using a technique that systematically harvests the best stock selections from the fund industry.”

Of course there are thousands of fund managers and a multitude of strategies to consider.

I have selected an exceptional manager, Nicholas Equity Income Fund, to track based on these three key requirements: (1) A proven long-term manager that generates alpha; (2) an income focused strategy that generates high dividend yields; and (3) a mid-cap market focus to provide investors with some additional diversification beyond the typical large cap dividend champions.

Income Opportunities in 2011: Updating Bill Gross's Long-Term Performance

In response to my previous article “Bill Gross’s Significant Income Opportunities in 2011”, one reader suggested that I take a look at Gross’s 2007 and 2008 picks since he felt like they performed poorly.

I had gone back to 2009 and 2010 in an effort to give readers a sense of Gross’s track record, which has been impressive.

The reader was correct – 2007 and 2008 were not stellar – but Gross’s picks actually did beat the appropriate LikeAssets benchmarks and the S&P500.

The hard part was the wild ride an investor experienced along the way.

First a brief update on the performance of the 2011 picks PTY and NLY.

Bill Gross's 2011 Fund Picks - Alternatives to Consider for Income Investors

In a previous article I provided some analysis of Bill Gross’s picks, historical (2009/2010) and current ones for 2011 provided in Barron’s Roundtable article.

One of Gross’s picks for 2011 was Pimco Corporate Income Fund (PTY), a closed end fund that uses leverage to generate investment income and maintain high dividend yields for investors.

Once Gross’s selection became public on Monday, PTY jumped, and now the premium to NAV is over 10% – a stiff entry price for investors to chase.

So I thought I would take a look at the other PIMCO closed end funds also managed by Bill Gross and team, and see if there are some alternatives to PTY.