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preferreds, convertibles, and investment-grade corp-
orate bonds. That gives the fund significant
credit risk, but manager George Cipolloni has steered
the fund from trouble in his
10
-year run at the fund.
T. Rowe Price Personal Strategy Income
PRSIX
enables you to tap a number of T. Rowe Price’s best port-
folio managers for a pretty low price. The fund has
more foreign exposure than most in the category as the
allocation team running it adjusts among the strate-
gies based on its view of which ones offer the best
risk/return profiles. However, it is the underlying man-
agers who win the fund a Silver rating.
Allocation—50% to 70% Equity
Silver-rated
Mairs & Power Balanced
MAPOX
is in
the classic
60
/
40
balanced fund mode. It has little
overseas exposure as its emphasis is on U.S. blue-chip
dividend-payers and high-quality bonds. Its
33%
maximum drawdown tells you that you’ve moved up
in equity risk from the previous category, but that’s
actually a little lower than most in the category, as the
fund’s equities are fairly defensive.
Vanguard STAR
VGSTX
likewise has a
60
/
40
setup,
but it has a
109%
downside capture, indicating it has
lost more than the benchmark in down periods. The
fund invests just in Vanguard’s actively managed funds.
A
20%
foreign weighting is part of the reason for the
high downside capture ratio.
Vanguard Balanced Index
VBIAX
is the simplest fund
profiled here. The Gold-rated fund has a set
60
/
40
asset mix that doesn’t change. The equities track a U.S.
Total stock market index and the bond side the
Barclays U.S. Aggregate Float Adjusted Bond Index,
which gives it an investment-grade portfolio.
T. Rowe Price Capital Appreciation
PRWCX
has been
an extraordinary achiever under David Giroux. The
Gold-rated fund is closed to new investors, but those
in it have done well. Giroux has a fair amount of
latitude with regard to asset-class exposure. He spreads
investments around equities, convertibles, high
yield, cash, investment-grade bonds, and bank loans.
His biggest value add, though, has been in selecting
quality companies.
T. Rowe Price Balanced
RPBAX
has a higher down-
side capture and maximum drawdown than the
funds we’ve looked at so far because it has a little more
in equities and foreign securities. Its neutral location
is
65%
stocks and
35%
bonds. This fund, too, spreads
out assets among an array of strategies including
T.
Rowe Price High Yield
,
T. Rowe Price Overseas
, and
T. Rowe Price Blue Chip Growth
.
America Funds American Balanced
ABALX
is a nice
low-cost straightforward balanced fund. The Silver-
rated fund charges its equity managers with delivering
a yield above the S
&
P
500
’s. On the bond side, the
sleeve is run relatively cautiously with Treasuries,
mortgages, and corporates.
Gold-rated
Dodge & Cox Balanced
DODBX
is one of
my favorites. It mixes a value equity portfolio with a
corporate-bond-heavy fixed-income portfolio to deliver
a great package at low costs. True, that value bias
stung in
2008
and
2009
, when some bank stocks got
crushed, but the fund’s long-term results, low costs,
and strong stewardship make it a great place to invest.
Silver-rated
Oakmark Equity & Income
OAKBX
has had
only middling results since Ed Studzinski retired in
late
2011
, but it has a lot going for it. Clyde McGregor
is an excellent investor, and he was joined by Colin
Hudson and Edward Wojciechowski in
2013
. The basic
strategy is to pair a focused-value equity portfolio
with a low-risk government-bond portfolio. That bond
sleeve is largely there for defense, and McGregor
hasn’t really taken much risk at any point with it.
FPA Crescent
FPACX
also has a low maximum
drawdown (just
28%
) because of Steve Romick’s focus
on playing defense. Most of the fund’s nonequity
exposure is in the form of cash, as Romick likes the
ballast it provides as well as the dry powder for a
market downturn. Romick’s focus is on absolute returns
and avoiding a permanent loss, so he looks for stocks
with big margins of safety.
Vanguard Wellington
VWELX
is the mirror image of
Vanguard Wellesley Income. It’s also managed by
Wellington Asset Management, but it has about two
thirds in equities. With low costs and strong man-
agement, it’s pretty clear why this fund is rated Gold.
K