The Appeal of Go-Anywhere Funds

World-allocation fund managers have the freedom to spread their investments far and wide.

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The team at Ivy Asset Strategy has an extremely broad mandate. At any given time, it can invest up to 100 percent of the fund in a single asset class, such as stocks or bonds. As of late, the fund has virtually abandoned the fixed-income market. In its annual report, management said: "With respect to fixed income, although these products have outperformed equities over the last decade, we don't believe this trend to be sustainable." Recently, almost half of the fund's net assets were invested in foreign stocks.

Rob Arnott mans the PIMCO fund, which invests in several underlying PIMCO funds. Arnott aims for returns of 6.5 percent plus inflation. At times, the fund will short stocks and use leverage. Currently, about 18 percent of the fund is invested in an underlying PIMCO fund that shorts stocks. The fund's other two largest investments are in Bill Gross's PIMCO Total Return (PTTAX), which generally sticks to the investment-grade bond realm, and PIMCO Unconstrained Bond (PUBAX), that has the ability to invest in a wide range of fixed-income securities.

Twitter: @benbaden