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Reallocating to a Real Asset Return Fund

April 27, 2011 by  
Filed under 401(k) Plans

2 Comments

I made a re-allocation move yesterday to a real asset return fund inside our 401k plan. I transferred money that I had been accumulating in a stable value return fund. I intend to use this money eventually to buy more TIPS for our guaranteed retirement income plan but the time just isn’t right for that now.

My motivation behind this move is to capture more gains flowing from increases in commodity prices. Gold and silver continue to rise, oil is now over $110/barrel and the dollar is at a 16 month low.  Many experts believe that the Fed’s actions will drive the dollar even lower. Oil prices show no signs of coming down anytime soon. Food prices are also increasing. Investing in commodities can be a hedge against such developments. So I moved a major chunk of our “TIPS” buying stash into the real asset return fund.

This fund is currently allocated 47% in a TIPS index, 30% in a REIT index, and 23% in the DJ AIG Commodity index. The real asset return fund was up 3.75% through the first quarter of 2011 and 16.6% over the last year.

Unfortunately, the real asset return fund in our 401k plan has an expense ratio of 0.80%. It’s not awful but still more than I am used to paying for our Vanguard index funds and ETFs.

Do any of you invest in a real asset return fund? Do you even have that option inside your retirement plan?


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2 Responses to “Reallocating to a Real Asset Return Fund”
  1. Accidental Retiree says:
    May 5, 2011 at 10:07 AM

    My most recent copy of “Money” Magazine mentioned a fund that sounds similar to what you’re discussing, above: PRPFX. We put a little of our mutual fund allocation into it, and we’ll see how it goes.

    Reply
  2. Shaun says:
    June 4, 2011 at 10:59 PM

    While I know this isn’t the same thing at all, I did just put some more money toward the Permanent Portfolio Fund, which has a huge portion in gold and silver, as well as plenty of resource stocks. I’ve kept a good portion of my portfolio in hard assets in the last year or so — I really think commodities are a good place to surf the inflationary wave we’ll be seeing in the next 24 months or so.

    Also, just found your blog and “+1″ed it. :p
    Shaun

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