iShares Conservative Allocation (AOK)
The last of our funds to buy is iShares Conservative Allocation (AOK), whose name pretty much tells you what you need to know.
The AOK is actually an ETF of funds, which takes a conservative allocation (hence the name) of several other iShares funds. Its top 10 holdings basically makes up the entire fund. The focus is on bonds, with about two-thirds of this ETF consisting of investments across the entire bond market — everything from treasuries to high-yield corporate bonds. AOK tops off the rest of its portfolio with stocks.
The result is a beta of 0.44, meaning the ETF is only 44% as volatile as the market. Meanwhile, it has delivered an alpha of 1.98, meaning it has outperformed its benchmark index by 1.98%. And when you’re looking for conservative funds to buy, it’s tough to beat numbers like that.
Expenses for AOK run 0.29%, making it the cheapest of our funds to buy.
As of this writing, Lawrence Meyers did not hold a position in any of the aforementioned securities. He is president of PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at email@example.com and follow his tweets @ichabodscranium.