The fund uses a model that compares stock values and interest rates, allocating more to stocks when valuations and rates are low, and less when they are high, according to Stephen Grant, the fund’s manager. “However, our stock selections have impacted performance more than asset allocation. We use a momentum strategy that looks at investor psychology and selects those stocks where investor sentiment is improving,” Grant said.
Investors are interested in a fund that can shift assets back and forth among stocks, bonds and cash to seek better opportunities or manage risk as market conditions warrant, said Tom Sarkany, marketing director for Value Line Funds. Value Line President Mitchell Appel calls the vehicle an aggressive allocation fund.
As of June 30, the fund held 73% in stocks, 23% in bonds and 4% in cash. The fund is one of seven asset-allocation funds among Schwab’s 23 third-party funds in the Additional Fund Categories section.
Investments can be made in the fund for a minimum of $1,000; there is no load and no transaction fees. More information is available here.