Balanced Fund Managers Discuss Portfolio Income
by Ned Notzon , Charles Shriver and Charles Rotblut, CFA
Ned Notzon and Charles Shriver are portfolio managers in T. Rowe Price’s U.S. Asset Allocation Group. I spoke with them in late July about their balanced stock/bond funds and what investors need to know when analyzing income investments.
—Charles Rotblut, CFA
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Charles Rotblut (CR): You are allowed a certain amount of leeway on how much you allocate to stocks and how much you allocate to bonds. What factors cause you to favor one asset class over the other?
Ned Notzon and Charles Shriver (NN and CS): We believe most people would like to have a mix between stocks and bonds. The mix is based on factors such as their age, their tolerance for risk, and their confidence in the economy and in the financial markets. We develop neutral weights for the market sectors and overweight or underweight these sectors based primarily on valuations. Ideally, we would overweight sectors that have done poorly, where the factors responsible for that poor performance are gone and the market has not responded. Often the market takes six to 18 months (or even longer) to respond.
CR: In terms of income, with the Federal Reserve’s quantitative easing programs coming to an end, have you shifted more toward stocks than bonds?
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Charles Shriver is a portfolio manager with T. Rowe Price Associates Inc. for several asset allocation portfolios within the Asset Allocation Group, including the Balanced, Spectrum and Personal Strategy funds, and is an associate portfolio manager for the Target Risk Strategies.
Charles Rotblut, CFA is a vice president at AAII and editor of the AAII Journal. Follow him on Twitter at twitter.com/charlesrotblut.
Discussion
Very good questions, and very good answers.
Also, very timely discussion. Thanks.
posted about 1 year ago by Russell from Florida
Mr Notzon did very well with his funds. My hope is that Mr Shriver continues in the same vein.
posted about 1 year ago by Ron from Ohio
I like the idea he is in favor or an investor to use DRIPS.
posted about 1 year ago by Robert from Oregon
THANKS, VERY INFORMATIVE. I WOULD BE INTERESTED IN THE SAME TYPE OF DICUSSION RE: E.T.F.S
posted about 1 year ago by David from New Hampshire
I would like to know how the current environment affects annuities and their cost.
posted about 1 year ago by Louis from Louisiana
Because I am not an expert in passing judgement on a company's financial position,it pays to seek to seek professional advice, or invest in a good mutual fund as outlined in this article.
posted 9 days ago by George Pettiford from Illinois
