These are holdings in a current portfolio I manage. Those marked with an asterisk are held in a taxable account, the others in a tax-deferred account.
"Hedged": HSGFX, DODBX, VWINX 35.7%
"Hot": FAIRX, VSTCX, SGENX, TAVFX, VHGEX 17%
"Niche: VGENX*, VGPMX*, gold coins* 22.3%
Income: VWALX*, HSTRX, money market fund 25%
If I count the amount of the "hedged" funds which are in bonds, the "hedged" category becomes 26.8% and the income category 33.9%.
This is a portfolio for someone who is several years from retirement. The normal level for the inflation "Niche" segment is 15%, so when it is rebalanced the excess will be reallocated to VWALX which is a high yield municipal bond fund.
It may appear that there is little or nothing in foreign stocks, but if one looks at the percent of foreign stocks in many US funds today one finds surprises: steady old VWINX for exmple has 16% of its assets abroad, HSGFX 12% and DODBX 11%. TAVFX has 34%, FAIRX 16%, VGENX 36%, VGPMX 88%, and VHGEX has 57%. Most of these were calculated at year end and may be higher or lower now, but my last calculation was that this portfolio has 21% of total assets in non-US stocks plus 11% in gold coins.
Some of the goals were diversification but relatively low price volatility. The inflation niche has the highest volatility and that is why it needs careful attention to "pruning" or rebalancing. If one has thirty years to retirement, volatility can be a benefit long term. But if one is going to need the money soon, the worst thing is a big drawdown just as one begins drawing funds.
Attention has been paid to tax efficiency by keeping taxable dividend payers in the un-taxed account and putting high yield munis and the inflation hedges in the taxed account.
The five funds in the "hot" segment could be reduced to just two or three for smaller accounts. One of those should be SGENX/FESGX or VHGEX which do largely the same things.
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