All-in-One Asset Allocation Funds

How to invest in an ETF or mutual fund that is itself a complete asset allocation portfolio.

Funds that invest in several different asset classes simultaneously are called "Asset Allocation Funds" or "Balanced Funds" or "Multi-Asset Funds." An advantage of this type of fund is that they're easy to buy and they provide immediate diversification across multiple asset classes. You can purchase these funds at any brokerage. These funds are available in a few different ways:

  • Exchange-traded funds (ETFs)
  • Mutual Funds, also known as "open-end funds"
  • Closed-end funds 

 

Providers of All-in-One Asset Allocation Funds

 

Vanguard offers a range of asset allocation mutual funds, including several focused on a target retirement date, called "Target Retirement" funds. Other categories of asset allocation funds offered by Vanguard include Target-risk, Traditional balanced, and Managed Payout.

 

Blackrock is the company behind the popular iShares exchange-traded funds. There are several iShares ETFs that focus on asset allocation, including the following:

  • iShares Aggressive Allocation ETF (AOA)
  • iShares Conservative Allocation ETF (AOK)
  • iShares Growth Allocation ETF (AOR)
  • iShares Moderate Allocation ETF (AOM)
  • iShares also offers several ETFs focused on target retirement dates.

 

PIMCO is well-known for their bond funds, but they also offer a selection of asset allocation funds including the following:

  • PIMCO Inflation Response Multi-Asset Fund (PIRMX)
  • PIMCO All Asset Fund (PAAIX)
  • PIMCO All Asset All Authority Fund (PAUIX)
  • PIMCO Global Multi-Asset Fund (PGAIX)
  • PIMCO Emerging Multi-Asset Fund (PEAWX)

PIMCO also offers several "Real Retirement" Target Date funds.

 

 

Other all-in-one options

In addition to the funds described above, there are other ways to create an all-in-one portfolio of funds. These options typically cost more than the above options and may only be available to qualified investors.

 

Separately managed accounts (or "separate accounts") are similar in concept to an all-in-one fund. To setup a portfolio in a separate account you pay a financial adviser to recommend a money manager. Then you pay the money manager to buy and sell on your behalf in a separate account.

 

Hedge Funds (or "private funds") invest in a wide range of securities, often using leverage and advanced strategies. These funds are intended for high net-worth investors.

 

Variable Insurance Trusts (or "variable annuities"). These products combine life insurance with investment portfolios, and require you to lock-up your funds for several years. Early withdrawal incurs a penalty and withdrawing after the lock-up period has complex tax implications.