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But increasingly average retail investors have been buying them to fill out their bond allocations.
Of course, the money had to come from somewhere, so bond allocations were at a fifteen-year low.
"With balanced funds you have to factor in interest rate movements and the manager's ability to shift between different stock and bond allocations," he said.
That means most T.D.F.'s that fixate on high bond allocations at 65 may not provide enough stocks-based growth for a longer life span.
Should the money managers adjust their bond allocations after the Federal Reserve said on Tuesday that it would keep interest rates until mid-2013?
Bond allocations had increased by more than could be explained by the increase in bond prices over the course of the year.
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While Lehman Brothers and Commerz International have increased their overall equity allocations, Daiwa has increased its bond allocation.
The stock portion mirrored the Standard & Poor's 500-stock index, while the domestic bond allocation was based on the Lehman Brothers Aggregate Bond index.
It took these institutions until 1993 — a full six years — to get their bond allocation back down to where it had been prior to the crash in October 1987.
The fund has cut its high-yield, or junk bond allocation from 35 percent in 2009 to less than 8 percent, as yields have fallen from more than 11 percent to less than 6 percent, on average.
This allocation was close to the average stock and bond allocation for all funds.
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