March 2007 Score Card — Part II: Asset Allocation

Two months ago, I took a look at the asset allocation of my taxable mutual fund investment. A result of that review was the decision to sell on of the large-cap holdings, CSVFX, as I found my investments didn’t have enough exposure in the mid- and small-cap categories. CSVFX was unloaded in February and part of the proceeds was used to purchase Vanguard Small-cap Value ETF (VBR) to boost the small-cap investment in my portfolio.

Using Morningstar’s Instant X-ray (here’s an entry on how to use Morningstar to research mutual funds), I entered my mutual fund holdings (symbols and market values) last night and pulled the latest asset allocation, which looks like this:

Compared to the asset allocation priori to the change, the domestic stocks part increased about 1% and overall foreign stock investment shrank about 2%. At the same time, bond holdings remains at the same level. The investment style box of now is more balanced between large-cap and mid-/small-cap stocks:

which shows that I have 53% of the total investments in large-cap stocks (59% earlier) and 46% in mid-/small-cap stocks (42% before). Meanwhile, the cost of owning my current mutual funds stays low. According to Morningstar,

• Average mutual fund expense ratio: 0.85%
• Expense ratio of similarly weighted hypothetical portfolio: 1.36%
• Estimated mutual fund expenses: $826.84

I am not planing for any drastic change any time soon. If I will, then my next targets will be CGM Focus Fund (CGMFX), which has generated heavy capital gains last year due to 300+% turnover ratio, and T. R. Price Emerging European and Mediterranean Fund (TREMX) as I will keep Dodge & Cox International Stock Fund (DODFX) as my core foreign investment.

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