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A Rating Downgrade for a Global Equity Fund

Given this world-allocation fund's hands-on strategy, a recent management change is cause for concern.

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Michael Herbst: Historically, the Ivy Asset Strategy Fund, which is also run in a clone setting as Waddell & Reed Asset Strategy, have pursued what we view as an at-times defensive, at-times high-octane global equity strategy, at least in recent years. What I mean by that is management tries to deliver equity-like returns with less volatility.

We assess the funds against the MSCI All Country World Index benchmark. Typically what you'll find is a big chunk in equities and smaller, usually single-digit, stakes in gold bullion or corporate commercial paper. Management has the ability to hedge its equity exposure, and historically it has done so up to 100%.

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