The
Wall Street Journal just gave some mixed ink to five mutual fund firms in a niche asset class. In the
WSJ's monthly "investing in funds" special report, Veronica Dagher
takes a look at a new type of asset allocation mutual funds, risk-party or balanced-risk funds, which amp up their bonds and cash holdings and then use leverage to boost their returns, to compensate for lower stocks and alternatives allocations.
The
WSJ cites Morningstar's count of only four such funds: $4-billion
Invesco Balanced-Risk Allocation [
profile], $427-million
AQR Risk Parity [
profile], $107-million
Managers AMG FQ Global Essentials [
profile] and $22-million
Putnam Dynamic Risk Allocation [
profile]. Morningstar looks past the name of another fund,
Diversified Risk Parity, to classify it as "more of a hedge-fund replication strategy."
Morningstar fund analysis associate director
Michael Herbst,
GMO asset allocation chief
Ben Inker, Putnam global asset allocation chief
Jeff Knight and AQR principal
Michael Mendelson all weighed in for the article. 
Edited by:
Neil Anderson, Managing Editor
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