Mix It Up

At Houston’s Wealth Development Strategies, President and CEO Cheryl D. Creuzot says the key to long-term investment success is asset allocation: successfully dividing a portfolio between equities and fixed income or cash and their related sub-categories. One’s investment time horizon is generally determined by one’s age and ability to tolerate risk. Creuzot is attracted to mutual funds that focus strategically on mitigating risk and growing returns. Such virtues are shared by her three picks: PIMCO Total Return A, American Funds American Mutual A, and Harbor Capital Appreciation. Each offers experienced managers and competitive expense ratios. Moreover, Creuzot commends their “disciplined, consistent processes that have resulted in long-term performance relative to their peer groups.”

1 PIMCO Total Return A (PTTAX) Creuzot sees this multi-sector bond fund as a great fixed income foundation for a portfolio. She says it has the strength to weather financial storms and to “provide capital appreciation as a plus for the capital preservation and income seeker, and volatility reduction for the growth investor.” Its diversified allocation and performance are heartening. The $281 billion fund’s emphasis is on higher-quality bonds, and it holds mostly U.S. government issues (41.5%) and corporate bonds and notes (21.3%), along with Treasury obligations, sovereign issues, short-term instruments, mortgage-backed securities, and others (37.2%). More agile than most bond funds, it can reallocate resources depending on changing market conditions to better manage risk, and it’s been known to outperform its benchmark, Barclays US Agg Bond TR USD. Its year-to-date return is 9.43% compared with Barclays 5.05%.
Yield: 3.33%
One-year return: 10.54%
Three-year return: 7.15%
Five-year return: 8.20%
Minimum taxable investment: $1,000
Expense ratio: 0.85%

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