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Blackrock Global Aloc


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Blackrock Global Aloc

  1. 1. march 2010 The 15 Best Funds To Complete Your Comeback
  2. 2. GLOBAL FUNDS It may have been the roughest five years in mutual fund history, but some managers still delivered double-digit returns. F ive years has long been an industry standard for measuring mutual fund investments, and the most re- cent five, of course, have not been pretty. The worst year was clearly 2008, when more than nine out of 10 funds lost money, and in most cases quite a bit. The more distressing statistic: In the past five years the average annual return for all mutual funds was barely 2 percent, even less than the rate of infla- tion. But numbers like these don’t quite ring a bell for investors who have stuck with a $1.4 billion fund run by a father-and-son team in the foothills of Austin, Texas. Named after the family, the Yacktman fund tries to be contrarian, buying out-of-favor stocks on the cheap. And it’s paid off, returning an eye-popping 40 percent over the past five years, a $4,000 return on a $10,000 investment. A $10,000 investment made a decade ago would be worth more than $30,000 now. “I’m not saying it to brag, but I feel good about what we’ve done,” says the father, Don Yacktman. For better or for worse, millions of Americans have staked their financial future on mutual funds, socking away their sav- ings in everything from 401(k) plans to Roth IRAs. Now, five years into one of the industry’s toughest periods, they are coming away with a valuable lesson: Instead of picking just any fund, investors need some criteria for finding the strongest and savvi- est fund managers. Over the past few years, fund managers have had to figure out how to take advantage of or simply dodge some of Wall Street’s wildest swings. “When you talk to managers and see how they made changes quarter to quarter, year over year, you can see which ones played the game really well,” says Dave Hintz, head of U.S. equities for Russell Investments, a firm that analyzes mutual fund performance. Market watchers say that if the past few years have taught Each year, SmartMoney compiles a list of the best of the best us anything, it’s that many managers can’t handle extreme mar- in the $11 trillion fund industry. We’ve highlighted as few as five ket environments. And very few funds returned much more than and as many as 100. This year we used a fund’s five-year track investors would have earned by simply holding a broad stock record as the primary hurdle. That time frame shows how manag- market index. In a recent study, business professors Eugene Fama ers have dealt with all the financial gyrations since 2005. We also and Kenneth French found that from 1984 to 2006, even most wanted funds that most can afford to buy (no $1 million minimum funds that notched gains didn’t earn enough to justify their fees. investments) and that aren’t too expensive to own (no big load or So, many experts say that when a mutual fund provides world- management fees). Using data from Morningstar, we identified 15 beating returns over time, investors should take notice. “You of the best mutual funds. Most hold at least some U.S. stocks, but become worth your salt when markets go down,” says Michael many own more-exotic assets such as bonds that fund schools in D. Cohn, chief investment officer of the Global Arena Investment Texas. Whatever they buy, the managers of these funds have done Management, a financial-planning firm. well for investors in trying times. By Daren Fonda, Reshma Kapadia and Russell Pearlman
  3. 3. AWARD-WINNING FUNDS global Funds As their name implies, these funds will span the world looking for potential investments. They’re a little broader than their foreign-fund cousins, since they often can hold as much in U.S.- based investments as they do in foreign ones. “ PeoPle need a one-stoP-shoP Fund, and we’re the granddaddy of them all,” says Dennis Stattman, who runs BlackRock Global Allocation. It may sound boastful, but the numbers seem to back him up. The fund is a $35 billion juggernaut with several hundred stocks and bonds from 32 countries. The fund doesn’t make big bets; no single position accounts for more than 2 percent. But it has managed to return an average 7.7 percent a year over the past five years; a $10,000 investment when the fund started in 1994 is now worth more than $43,000. The Princeton, N.J.–based fund’s 24 analysts look for compa- nies that aren’t priced highly compared to the assets they own or the cash they generate. The goal, Stattman says, is to buy invest- ments when they’re on sale. That often means he’s buying stocks if the company that issued the bonds sees its stock soar. and bonds during panics. As markets tumbled in 2008, Stattman Stattman says he still sees plenty of things that could go wrong used some cash to buy stocks and convertible bonds while still with the economy, a fact that prevents him from converting more holding low-risk but low-yielding government bonds. The fund of his cash and bond holdings into stocks. The stocks he does was a little early; it lost more than 20 percent in 2008. But the own are traditional defensive stalwarts like Johnson & Johnson, bets have started to pay off. Even though it had billions in the AT&T and Pfizer. One group Stattman is optimistic about is low-yielding bonds, BlackRock Global Allocation gained about Japanese stocks, which many investment pros hate. He says he 21 percent in 2009, about the same as the broader market. Statt- can’t pass up companies such as telecommunications firm NTT man says the convertible bonds are a less risky way of investing in Docomo and industrial Sumitomo Chemical because they have stocks, since the bonds pay interest for a time, and he’ll still profit good dividends and are trading at multidecade lows. WINNER RUNNERS-Up blacKrocK global ivy asset strategy (WASCX) First eagle global (FESGX) allocation (MCLOX) managers: michael avery and ryan managers: abhay deshPande and manager: dennis stattman caldwell matthew mclennan assets: $37.0 billion assets: $20.9 billion assets: $20.7 billion exPenses Per $10,000: $188 exPenses Per $10,000: $180 exPenses Per $10,000: $189 minimum investment: $1,000 minimum investment: $500 minimum investment: $2,500 5-year avg. annual return: 7.7% 5-year avg. annual return: 14.5% 5-year avg. annual return: 8.4% 10-year avg. annual return: 8.0% 10-year avg. annual return: 10.0% 10-year avg. annual return: 12.0% QuicK taKe: A one-stop global asset fund, QuicK taKe: This wide-ranging fund invests QuicK taKe: A broadly diversified fund, it it owns small stakes in hundreds of stocks, in everything from emerging-market stocks holds foreign stocks, bonds and cash and bonds, currencies and other foreign assets. to foreign currencies and gold bullion. may load up on commodities such as gold. Reprinted and excerpted from the March 2010 issue of SmartMoney. BlackRock had no influence on the editorial content of this article. SmartMoney does not endorse any product or service of BlackRock. Reprinted by permission of SmartMoney. Copyright © 2010 SmartMoney. SmartMoney is a joint publishing venture of Dow Jones & Company, Inc. and SM Partnership. All Rights Reserved Worldwide.
  4. 4. This is an article from Smart Money originally published for March 2010. The opinions presented are those of Smart Money as of the date noted and not those of BlackRock. Any indication of performance is historical and is not intended to project future results. Performance shown is for Investor C shares. The maximum CDSC of 1% for C shares is reduced to 0% after 1 year. This CDSC applies to shares redeemed within 1 year. Please refer to the attached fact sheet for more current performance and portfolio information. SMARTMONEY-0310
  5. 5. Global Allocation Fund, Inc. FOURTH QUARTER 2009 $10,000 Over Time — Investor A 2/3/89 - 12/31/09 Ticker Symbols Investor A: MDLOX Investor B: MBLOX* $125,000 $91,324 Investor C: MCLOX Institutional: MALOX 100,000 Class R: MRLOX 75,000 Lipper Classification3 50,000 Global Flexible Portfolio Funds 25,000 Overall Morningstar Rating™ — Investor A ★★★★ 12/89 12/93 12/97 12/01 12/05 12/09 Based on a hypothetical investment of $10,000 in Investor A shares on 2/3/1989 with an initial sales charge of 5.25%, resulting in a net investment of $9,475. Assumes reinvestment of dividends and capital gains. Performance for other share classes will vary. Fund operating expenses, Rated against 137 World Allocation Funds, as of including 12b-1 fees, management fees, distribution fees and other expenses, were deducted. 12/31/09, based on risk-adjusted total return. Ratings Returns for periods prior to Investor A inception are based on the fund's Institutional returns, are determined monthly and subject to change. The adjusted to reflect the higher Investor A fees. Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures Performance Analysis associated with its 3-, 5- and 10-year (if applicable) % Average Annual Total Returns (12/31/09)1 Morningstar Rating metrics.†† Since Objective Without Sales Charge 1 Year 3 Years 5 Years 10 Years Inception2 Investor A 21.64 4.09 7.61 8.60 11.17 Seeks to provide high total return. Investor B* 20.71 3.27 6.76 7.93 10.84 Strategy Investor C 20.81 3.31 6.79 7.77 10.32 Institutional 21.99 4.37 7.88 8.88 11.45 A fully managed investment policy using US and Class R 21.26 3.75 7.28 8.35 10.90 foreign equity and debt and money-market securities With Sales Charge for high total investment return, varying investments by type and market depending on changing market Investor A 15.26 2.23 6.45 8.02 10.88 and economic trends. Investor B* 16.21 2.18 6.45 7.93 10.84 Investor C 19.81 3.31 6.79 7.77 10.32 Portfolio Statistics Fund Benchmark4 Lipper Avg.3 24.97 -0.64 5.02 5.63 2 FTSE World4 34.38 -4.03 3.63 1.15 Inception Date 2/3/89 12/31/93 Citigroup World Gov't Bond5 2.55 8.06 4.51 6.63 Number of Holdings 808 2,313 Weighted Avg. Mkt. Cap $61.4 B $60.8 B Internal Ref. Benchmark6 19.22 0.90 4.00 3.35 Size of Fund $35.9 B % Calendar Year Returns (Fund Performance Without Sales Charges)1 Dividend Frequency Semi-Annual Holdings include all equity and fixed income positions 2004 2005 2006 2007 2008 Year-to-Date 4Q09 including derivatives but excluding cash. Investor A 14.27 10.33 15.94 16.71 –20.56 21.64 3.29 Investor B* 13.36 9.53 14.98 15.76 –21.19 20.71 3.10 Risk Measures (3-year)7 Fund Benchmark4 Investor C 13.32 9.53 14.98 15.85 –21.21 20.81 3.11 Standard Deviation 13.41% 22.44% Institutional 14.51 10.62 16.18 17.00 –20.35 21.99 3.34 Beta vs. Benchmark 0.57 1.00 Class R 13.95 10.08 15.60 16.33 –20.83 21.26 3.18 R-Squared vs. Benchmark 89.53% Lipper Avg.3 15.37 11.25 13.16 10.15 –30.20 24.97 2.92 Sharpe Ratio 0.14 -0.28 FTSE World4 16.06 11.32 21.47 11.32 –40.91 34.38 4.49 Annual Fund Operating Expenses (% of Fund Assets) Citigroup World Gov't Bond5 10.35 –6.88 6.12 10.95 10.89 2.55 –1.93 Total/net annual operating expenses as stated in this Internal Ref. fund's most recent prospectus are Benchmark6 11.58 4.15 13.75 10.30 –21.88 19.22 2.52 Total Net Data represents past performance and does not guarantee future results. Investment return and Investor A 1.22 1.12 principal value of an investment will fluctuate so an investor’s shares, when redeemed, may be Investor B 2.03 1.92 worth more or less than their original cost. Current performance may be lower or higher than that Investor C 1.98 1.88 shown. All returns assume reinvestment of dividends and capital gains distributions. Refer to for performance current to the most recent month-end. The share classes Institutional 0.97 0.86 have different sales charges, ongoing account maintenance and distribution fees and other Class R 1.57 1.46 features. Average annual total returns with sales charge reflect the deduction of current maximum initial sales charge of 5.25% for Inv. A shares and applicable contingent deferred sales Net operating expenses exclude investment interest charges (CDSC) for Inv. B and Inv. C shares. The maximum CDSC of 4.5% for B shares is reduced expenses, acquired fund fees, if any, and certain other to 0% after 6 years. B share performance reflects conversion to A shares after 8 years. The fund expenses net of all waivers and reimbursements. maximum CDSC of 1% for C shares is reduced to 0% after 1 year. Institutional and Class R shares BlackRock has agreed voluntarily to waive certain fees have no front- or back-end load. Inception date and restated performance for R shares are based on Institutional shares. See footnote 2 for explanation. and expenses, but may discontinue the voluntary waivers at any time without notice. *Investor B shares are generally not available for purchase, except for exchanges and certain other exceptions. Please see the fund’s prospectus for further details. NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
  6. 6. Lipper Rankings (12/31/09)3 Geographic Allocation (% of Net Assets) Quartile Ranking North America 47.1 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10 Year Investor A 83 3 5 4 3 1 1 1 Cash/Cash Equivalents 11.3 Investor B 89 7 10 6 3 1 2 2 Europe 15.2 Investor C 88 6 9 5 3 1 1 1 South America 4.3 Institutional 81 2 4 3 3 1 1 1 out of out of out of out of Asia 20.5 Lipper Category3 144 61 36 22 Africa/Middle East 1.6 Lipper Category: Global Flexible Portfolio Funds. All share classes of the fund are invested in a Top 10 Equity Holdings (% of Net Assets) common portfolio. Lipper rankings are based on total return excluding sales charges. Data shown represents past performance and is not an indication of future results.3 1. SPDR Gold Trust 1.6 2. Petrobras Petro Brasileiro 1.0 Asset Mix (% of Net Assets) 3. Microsoft 0.9 US Stocks 30.7 4. Bristol-Myers Squibb 0.8 5. AT&T 0.7 International Bonds 16.7 6. ExxonMobil 0.7 US Bonds 13.9 7. Johnson & Johnson 0.7 8. Chevron 0.6 International Stocks 27.4 9. IBM 0.6 Cash/Cash Equivalents* 11.3 10. JPMorgan Chase 0.6 Portfolio Management *Actively managed as part of the fund's investment strategy. Can be considered "Zero Duration Fixed Income" and includes US dollar and non-US dollar short-term securities and other money- Dennis Stattman market type instruments. Dan Chamby Aldo Roldan, PhD Important Risks of the Fund: Data as of date noted. The fund is actively managed and its characteristics will vary. Any holdings shown are for information only and should not be deemed as a recommendation to buy or sell the securities mentioned. Stock and bond values fluctuate in price so the value of your investment can go down depending on market conditions. The two main risks related to fixed income investing are interest-rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. Investments in non-investment-grade debt securities (“high-yield” or “junk” bonds) may be subject to greater market fluctuations and risk of default or loss of income and principal than securities in higher rating categories. Asset allocation strategies do not assure profit and do not protect against loss. The fund may actively engage in short-selling, which entails special risks. If the fund makes short sales in securities that increase in value, the fund will lose value. Any loss on short positions may or may not be offset by investing short-sale proceeds in other investments. Investing in derivatives entails specific risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. You should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. The fund's prospectus contains this and other information about the fund and is available, along with information on other BlackRock funds, by calling 800-882-0052 or from your financial professional. The prospectus should be read carefully before investing. Unless otherwise noted, all information contained herein is as of the date of publication of this fact sheet. 1 Institutional and Class R shares are sold to a limited group of investors, including certain retirement plans. Institutional shares also are sold to certain investment programs. The fund may charge a 2% redemption fee for sales or exchanges of shares made within 30 days of purchase. Performance does not reflect this potential fee. See prospectus for details. 2 Before 1/3/03, Class R share performance is that of Institutional shares (which have no distribution fees) restated for Class R share distribution fees. Performance for Class R shares after their inception date reflects actual class performance. Performance for Investor A and C shares before their introduction (10/21/94) is based on Institutional share performance adjusted to reflect class-specific fees applicable to Investor A and C shares at the time of their launch. This information may be considered when assessing fund performance, but does not represent actual performance of those share classes. 3 Lipper funds' average returns and rankings are according to Lipper, Inc. Lipper Global Flexible Portfolio Funds classification consists of all funds tracked by Lipper that allocate their investments across various asset classes, including domestic and foreign stocks, bonds and money market instruments, with a focus on total return. Lipper Global Flexible Portfolio Funds Average and Lipper rankings reflect total return performance of funds excluding sales charges. 4 The broad-based capitalization-weighted FTSE World Index comprises 2,200 equities from 24 countries in 12 regions, including the United States. It is not possible to invest directly in an index. 5 The Citigroup World Government Bond Index includes the most significant and liquid government bond markets globally with at least an investment-grade rating. Currently, this includes all countries in the Citigroup EMU Governments Index (EGBI) and Australia, Canada, Denmark, Japan, Sweden, Switzerland, United Kingdom and the United States. Index weights are based on the market capitalization of qualifying outstanding debt stocks. 6 The Internal Reference Benchmark is 36% S&P 500 Index, 24% FTSE World (ex-US), 24% BofA Merrill Lynch 5-year US Treasury Bond Index and 16% Citigroup Non-US Dollar World Government Bond Index. The unmanaged S&P 500 Index covers 500 industrial, utility, transportation and financial companies of the US markets (mostly NYSE issues). It represents about 75% of NYSE market capitalization and 30% of NYSE issues. The unmanaged, capitalization- weighted FTSE World Index (ex-US) Index comprises 1,630 companies in 28 countries, excluding the United States. The unmanaged BofA ML 5-year US Treasury Bond Index tracks the total return of the current coupon 5-year US Treasury bond. The unmanaged, market-capitalization-weighted Citigroup Non-US Dollar World Government Bond Index tracks 10 government bond indices, excluding the United States. 7 Risk statistics, if any, are measured based on Investor A class monthly returns for the 3-year period at quarter-end. These measures of past risk are not complete or, necessarily, representative measures of future risk and cannot predict a fund's performance. Benchmark-related risk measures are calculated in relation to the FTSE World Index. Standard deviation is a statistical measure of the volatility of the fund's returns. The Sharpe ratio uses a fund's standard deviation and its excess return (the difference between the fund's return and the risk-free return of 90-day Treasury Bills) to determine reward per unit of risk. Beta is a measure of a fund's sensitivity to market movements. A portfolio with a beta greater than 1 is more volatile than the market and a portfolio with a beta less than 1 is less volatile than the market. R-squared reflects the percentage of a fund's movements that are explained by movements in its benchmark index, showing the degree of correlation between the fund and the benchmark. This figure also is helpful in assessing how likely it is that beta is statistically significant. †† For each fund with at least a 3-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) BlackRock Global Allocation Fund was rated against the following numbers of US-domiciled World Allocation funds over the following time periods: 137 in the last 3 years, 90 in the last 5 years and 50 in the last 10 years. With respect to these World Allocation funds, BlackRock Global Allocation Fund received a Morningstar Rating of 4, 4 and 4 stars for the 3-, 5- and 10-year periods, respectively. Morningstar Rating is for the Investor A share class only; other classes may have different performance characteristics. © 2010 Morningstar, Inc. All rights reserved. FOR MORE INFORMATION: ©2010 BlackRock, Inc. All Rights Reserved. Prepared by BlackRock Investments, LLC, member FINRA. BLACKROCK is a registered trademark of BlackRock, Inc. All other trademarks are the property of their respective owners. 01/10 - Global Allocation Fund, Inc.