How to choose an allocation fund

Too many funds and stocks in a portfolio can create clutter and make rebalancing time-consuming. Allocation funds such as balanced funds can make it easier to stay diversified and invested during market volatility. That’s because these funds automatically rebalance, moderating big gains and losses. And the funds can provide exposure to more than one security type and market. Russ Kinnel, senior principal of ratings for Morningstar and editor of Morningstar FundInvestor newsletter, discusses his list of the best balanced and allocation funds.

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On this episode:

00:00:00 Welcome

00:00:48 Balanced funds and market volatility

00:01:18 Who allocation funds are designed for

00:03:30 Foreign exposure in Vanguard Global Wellesley Income fund

00:04:40 Dividend income focus at Vanguard Global Wellington and American Funds Capital Income Builder funds

00:05:22 Inflation‑protection strategies in Pimco and T. Rowe Price funds

00:07:45 Key takeaways on balanced and allocation funds

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