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Top Allocation Funds That Think Outside the (Style) Box

A reader gets us thinking about quirky allocation funds.

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The best ideas often come from our readers. Last week, reader David M. sent feedback on my coverage of  Manning & Napier Pro-Blend Moderate Term (EXBAX). We swapped e-mails about that fund and other favored allocation funds. David noted that many of the funds on our mutual short list were quirky allocation funds from obscure boutique shops that investors should be reminded about. He said I should write an article about them. He even gave me the title. So, hat tip to him, and here we go.

Once Bitten ...
It's natural: Get burned bad enough and you start avoiding the stove. That's what has happened to some equity fund investors since 2008's brutal market. They were scorched and have sold their stock funds and piled into Treasuries, CDs, and money markets. But if you have a long time horizon, you need some stock exposure or, at least, exposure to securities with the potential to post equitylike returns. My colleague Russ Kinnel touches on some interesting options in this article.

And even those who discovered the hard way that they had too much money in stocks shouldn't completely withdraw from them. It may be impossible to make back your nest egg over time if you don't keep at least some riskier, but potentially higher-returning, asset classes in your portfolio mix.

Michael Breen does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.