BlackRock Global Allocation Fund

Scorecard
3 / 5 Stars
Lipper
3 4 3 4 3
Zacks Investment Research
3 (Hold)
Standard & Poor's
3 / 5 Stars
TheStreet.com
D+ (Sell)

#15 in World Allocation

U.S. News evaluated 121 World Allocation Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 12.54 percent over the past year, 5.81 percent over the past three years, 12.64 percent over the past five years, and 7.93 percent over the past decade.

Trailing Returns Updated 02.28.2014
Year to date 0.9%
1 Year 12.5%
3 Years (Annualized) 5.8%
5 Years (Annualized) 12.6%
10 Years (Annualized) 7.9%

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Summary

In the mutual fund world, it doesn't necessarily hold true that a jack of all trades is a master of none. The BlackRock Global Allocation fund certainly stretches into all corners of the market, but it also has done a fine job of expertly managing its wide range of holdings.

As of March 05, 2014, the fund has assets totaling $59.79 billion. Its portfolio contains a diverse mix of securities, both domestic and foreign.

This fund had a bit of a middling year in 2009: Its 21.6 percent returns landed it in the 61st percentile of Morningstar's world allocation category. Still, it showed its strengths by remaining nimble during the downturn. In particular, its management sensed some of the alarms before the financial meltdown, avoiding the worst in the financial and consumer sectors. The fund has also benefited from safer investments in convertible bonds and inflation-protected treasuries. But even as it has brought in solid returns from these conservative fixed-income holdings, it has also looked to beef up the equity portion of its portfolio. The fund has returned 12.54 percent over the past year and 5.81 percent over the past three years.

Historically, the fund has had a diverse and somewhat exotic feel. For starters, its toolbox, which includes derivatives, junk bonds, and the option to sell short, is more expansive than those of many of its competitors. This diversity has paid off over the years but has also caused some short-term losses relative to its peers. "Management's strategy will cause the fund to move out of step with the competition, sometimes for prolonged periods, so investors considering it for the long haul will need to ride out its periodic rough [patches]," notes Morningstar. The fund has returned 12.64 percent over the past five years and 7.93 percent over the past decade.

Investment Strategy

The fund gives itself wide leeway to pursue a variety of trading techniques, banking on the diversity of its allocations to balance out any risks it takes. The fund will shift emphasis among asset types and geographical regions as market conditions change. Overall, flexibility is the fund's mantra. It has very few restrictions on investments and can hold assets in any part of the world. 

Role in Portfolio

Morningstar calls it a "core" investment. 

Management

The fund is headed up by veteran manager Dennis Stattman, who has held that post since the fund launched in 1989 (Class A shares were first offered in 1994). Stattman, who has the final word on which securities will make it into the portfolio, is significantly invested in the fund. Morningstar considers heavy manager investment "a sign of confidence in the investment process." Dan Chamby and Aldo Rodan are also co-managers at the fund.

Fees

The BlackRock Global Allocation Fund is an affordable investment. Its expense ratio is 1.05 percent. 

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Risk

The fund banks on the diversity of its allocations to balance out any risks it takes.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 4 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-03-12

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 4 for one year, 5 for five years, and 2 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-03-12

The fund's Value Line Risk Rank, a measure of volatility, is 2 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-03-12

In the annual Lipper/Barron's Fund Families Survey for 2009, American Funds ranks 31st out of 61 fund families surveyed.

Morningstar gives this fund a stewardship rating of B on a scale of A to F, noting, "On Stattman's watch, management has proven unafraid to make bold calls, especially when it scouts out prospects for dramatic improvement or real trouble across various sectors, regions, and asset classes."

Morningstar

In the annual Lipper/Barron's Fund Families Survey for 2009, American Funds ranks 31st out of 61 fund families surveyed.

Morningstar gives this fund a stewardship rating of B on a scale of A to F, noting, "On Stattman's watch, management has proven unafraid to make bold calls, especially when it scouts out prospects for dramatic improvement or real trouble across various sectors, regions, and asset classes."

Morningstar