Managing risk with asset allocation

 

Strike a balance by diversifying among different asset classes

Diversification is all about managing risk by allocating your portfolio among different asset classes, such as stocks, bonds and cash. This approach may help cushion the blow if changing market conditions affect one asset class particularly hard. Understanding the concept and importance of diversification is key to successful investing, particularly aligning asset allocation to time horizon and risk tolerance. 
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Aggressive allocation funds

Aggressive allocation funds seek to provide long-term capital appreciation by investing 70% or more of their assets in equities, with the remainder in fixed income and cash.
 

Mutual Funds

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Overall Morningstar
Rating
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Category
Total Net
Assets
Yield
Net Expense
Ratio
 

ETFs

Data as of ET
Fund Name / Symbol
Overall Morningstar
Rating
Category
Market Price
Today's %
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Conservative allocation funds

Conservative allocation portfolios seek to preserve capital and generate income by investing 15% to 50% of their assets in equities and 50% to 85% of assets in fixed income and cash.
 

Mutual Funds

Fund Name / Symbol
Overall Morningstar
Rating
Fund
Category
Total Net
Assets
Yield
Net Expense
Ratio
 

ETFs

Data as of ET
Fund Name / Symbol
Overall Morningstar
Rating
Category
Market Price
Today's %
Change
Expense
Ratio

Moderate allocation funds

Moderate allocation funds seek to provide a balance of capital appreciation and income by investing around 50% to 70% of their assets in equities and the remainder in fixed income and cash.
 

Mutual Funds

Fund Name / Symbol
Overall Morningstar
Rating
Fund
Category
Total Net
Assets
Yield
Net Expense
Ratio
 

ETFs

Data as of ET
Fund Name / Symbol
Overall Morningstar
Rating
Category
Market Price
Today's %
Change
Expense
Ratio

Fund selection criteria: The funds displayed are not a recommendation by E*TRADE Securities or its affiliates to buy, sell or hold any security, financial product or instrument nor is it an endorsement of any specific security, company, fund family, product or service. All screens display funds within the respective category and group. All mutual fund screens exclude funds not open to new investors, exclude funds that have expense ratios greater than 2% and only include NLNTF mutual funds with initial investment minimums of $5,000 or less. All ETF screens exclude exchange traded notes and leveraged ETFs. The top performing funds, based on 3 Year total return, within the various category screens are shown in the initial display along with the all the NLNTF All-Star funds of the corresponding category. All funds in the initial display are ranked by 3 Year total return.

All mutual fund screens exclude funds not open to new investors and only include mutual funds with initial investment minimum less than $5,000. All ETF screens exclude exchange traded notes and leveraged ETFs.

International investing carries certain risks that can be different from the risks of U.S. investments. These risks can include political or economical instability, changing currency rates, foreign taxes, reduced liquidity (difficulty selling securities held by a fund) and different regulatory or financial accounting standards.

The Morningstar RatingTM for funds is calculated for management investment company products registered under the Investment Company Act of 1940 (including mutual funds, exchange-traded funds and closed-end funds) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are analyzed as a single product category for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star.

The All-Star List is a quarterly list of leading funds and ETFs selected by E*TRADE Capital Management, LLC. Funds selected for the All-Star List are selected from the no-load mutual funds offered through E*TRADE Securities.

All-Star Funds typically have at least a three year track record and compare favorably against their peers based on historical return, risk, expenses, manager tenure, performance and style consistency, asset size and growth and must be 1) structured through sound investment philosophy and process, 2) implemented with acceptable level of investment risk management strategy and 3) supported by a reputable investment firm. To view the fund's Report Card with additional performance metrics, including standardized quarterly results, please click on the fund name.

Expense ratios are provided by Morningstar and are based on information obtained from the ETF's last audited financial statement. Current expense ratios for the ETFs may be different.

Yield is a measure of the fund's income distributions, as a percentage of the fund price. Morningstar calculates this figure by summing the income distributions over the trailing 12 months and dividing that by the sum of the last month's ending NAV plus any capital gains distributed over the 12-month period.
For a definition of terms, please click on the Data Definitions link. Data definitions provided by Morningstar.
Quotes may be delayed by at least 15 minutes. Quotes and other information supplied by independent providers identified on the E*TRADE vendor disclosures page.

International Exchange-Traded Funds and mutual funds offer an easy way to participate in foreign markets. They generally provide broad diversification and will handle complicated issues, such as foreign tax payments and currency conversions, on behalf of investors.
E*TRADE Securities may act as principal or agent on any fixed-income transaction. When acting as principal, we will add a markup to any purchase, and subtract a markdown from every sale. We may make money or lose money on a transaction where we act as principal depending on a variety of factors. The markup or markdown will be included in the price quoted to you and you will not be charged any commission or transaction fee for a principal trade. Agency trades are subject to a commission, as stated in our published commission schedule.
All bonds are subject to interest rate risk and you may lose money. Bonds sold by issuers with lower credit ratings may offer higher yields than bonds issued by higher rated or "investment grade" issuers, but are usually associated with higher risks. High yield bonds, also known as "junk bonds", generally have a greater risk of default, which increases the risk that an issuer may be unable to pay interest and principal on the issue. In addition, high yield bonds tend to have higher interest rate risk and liquidity risk, particularly in volatile market conditions, which makes it more difficult to sell the bonds. Before investing in high yield bonds, you should carefully consider and understand the risks associated with investing in high yield bonds.

 

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