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Restructuring A Portfolio of Funds
BEFORE
The ''Cranes,'' a couple in their early 40s, held $544,051 in taxable and
tax-deferred retirement accounts--more than 80% of it in 15 equity mutual
funds. Working with Lou Stanasolovich of Legend Financial Advisors, they
decided to scale back their equity holdings about 60%. Stanasolovich analyzed
the funds for investment style and performance and developed a new investment
plan
DOMESTIC EQUITIES***
ALLOCATION(%) INVESTMENT CATEGORY
BERGER 100 2.9 MID-CAP GROWTH
NEUBERGER & BERMAN MANHATTAN 1.0* MID-CAP BLEND
T. ROWE PRICE CAP. APPREC. 4.4* MID-CAP VALUE
JANUS TWENTY 2.9 LARGE-CAP GROWTH
AMER. CENT.-20thC ULTRA INV. 8.2 LARGE-CAP GROWTH
GROWTH FUND OF AMERICA 10.0* LARGE-CAP GROWTH
CGM MUTUAL 6.0 LARGE-CAP VALUE
AMERICAN MUTUAL 11.3* LARGE-CAP VALUE
WASHINGTON MUTUAL INVESTORS 8.1* LARGE-CAP VALUE
T. ROWE PRICE EQUITY-INCOME 5.5* LARGE-CAP VALUE
INVESCO INDUSTRIAL INCOME 3.6 DOMESTIC HYBRID
INTERNATIONAL EQUITIES
SMALLCAP WORLD 8.8* SMALL-CAP GROWTH**
MONTGOMERY EMERGING MARKETS 0.7 DIV. EMRG. MKTS.
OAKMARK INTERNATIONAL 0.8 FOREIGN
EUROPACIFIC GROWTH 6.2* FOREIGN
*Funds in tax-deferred retirement accounts
**Advisor considers this an international fund, while Morningstar puts it with
domestic funds.
***Includes 0.4% in stocks
AFTER
Stanasolovich slashed domestic equities to 23.5%, mainly by cutting large-cap
stocks. He added small growth and value funds to the mix and put in new mid-cap
funds. He unloaded several international funds-but boosted the allocation in
total by adding to several existing position and bringing in others. About 8%
went toward low-risk short-term bond funds, 14% into domestic bond funds. In
international bond funds, he selected both investment grade and low-quality.
For further diversification, he introduced real estate funds and a
risk-arbitrage fund.
SHORT-TERM BONDS
ALLOCATION(%) INVESTMENT CATEGORY
PILGRIM AMERICA PRIME RATE** 4.4% ULTRA SHORT
PIMCO LOW DURATION 3.7 SHORT TERM
DOMESTIC EQUITIES***
BERGER SMALL CO. GROWTH 5.5 SMALL-CAP GROWTH
ROYCE MICRO-CAP 3.7 SMALL-CAP VALUE
VAN WAGONER MID-CAP 5.5* MID-CAP GROWTH
FRANKLIN MUTUAL BEACON Z 2.8* MID-CAP VALUE
JANUS TWENTY 2.9 LARGE-CAP GROWTH
NEUBERGER & BERMAN GUARDIAN 2.8 LARGE-CAP VALUE
INTERNATIONAL EQUITIES
OAKMARK INTERNATIONAL 3.8 FOREIGN
ACORN INTERNATIONAL 2.8 FOREIGN
WARBURG PINCUS INT. EQ. COMM. 2.4 FOREIGN
IVY INTERNATIONAL A 2.4* FOREIGN
SOGEN OVERSEAS 1.8* FOREIGN
MORGAN STANLEY EMRG. MKTS. A 5.0 DIV. EMRG. MKTS.
MONTGOMERY EMERGING MARKETS 3.7* DIV. EMRG. MKTS.
DOMESTIC BONDS
NORTHEAST INVESTORS 5.3* HIGH-YIELD
PIMCO TOTAL RETURN 4.9* INTERMEDIATE-TERM
LOOMIS SAYLES BOND 3.7* LONG-TERM
INTERNATIONAL BONDS
PIMCO FOREIGN 4.4* INTERNATIONAL BOND
SCUDDER EMRG. MKTS. INCOME 2.2* INTERNATIONAL BOND
REAL ESTATE
COHEN & STEERS REALTY SHARES 2.9* REAL ESTATE
HEITMAN REAL ESTATE-INSTL. 2.9* REAL ESTATE
CGM REALTY SHARES 1.8* REAL ESTATE
RISK ARBITRAGE
MERGER FUND 3.8* MID-CAP BLEND
*Funds in tax-deferred retirement accounts
**Closed-end fund
***Includes 0.4% in stocks
Percentages may not equal 100 because of rounding.
DATA: LEGEND FINANCIAL ADVISORS INC., MORNINGSTAR INC.
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Updated June 15, 1997 by bwwebmaster
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