Amana Portfolio Allocation
Amana Portfolio Allocation
Assume that I'm restricted to these 3 funds (just take it for granted, no use arguing why):
AMAGX
AMANX
AMDWX
What is the best allocation? (Currently 40/40/20).
Thanks.
AMAGX
AMANX
AMDWX
What is the best allocation? (Currently 40/40/20).
Thanks.
Re: Amana Portfolio Allocation
Pick your desired portfolio AA, plug that allocation into Morningstar Instant X-Ray using Vanguard Total Stock / Total International / Total Bond. Then in another browser window of Instant X-Ray, adjust your allocation of those three funds until you get as close as you can. I'd focus on the domestic stocks / foreign stocks / bonds breakdown primarily. (I'm assuming that this is your entire portfolio. If you have other accounts, that changes the overall picture quite a bit.)
Re: Amana Portfolio Allocation
I would probably go 0/80/20. The growth fund would just offer a growth tilt to the portfolio. Most around here would prefer to tilt to the value side.
It appears that these are the only 3 funds offered by Amana. Do you have plans for bonds or is that just out of the picture?
It appears that these are the only 3 funds offered by Amana. Do you have plans for bonds or is that just out of the picture?
52% TSM, 23% TISM, 24.5% TBM, 0.5% cash
Re: Amana Portfolio Allocation
It is noted that only these are all stock funds except the third which holds 20% in cash (for now).
It would be a good idea to think about the stock/fixed income distribution and what to do if almost 100% stock is too risky.
It would be a good idea to think about the stock/fixed income distribution and what to do if almost 100% stock is too risky.
Re: Amana Portfolio Allocation
mhc wrote:I would probably go 0/80/20. The growth fund would just offer a growth tilt to the portfolio. Most around here would prefer to tilt to the value side.
It appears that these are the only 3 funds offered by Amana. Do you have plans for bonds or is that just out of the picture?
Thanks. Yes unfortunately bonds are out of the picture.
Re: Amana Portfolio Allocation
Thanks. As bonds are unavailable to me, I'm trying to figure out a fixed-income bond substitute. I've been looking to REIT's, MLP's, and real assets including farmland/ranch land.dbr wrote:It is noted that only these are all stock funds except the third which holds 20% in cash (for now).
It would be a good idea to think about the stock/fixed income distribution and what to do if almost 100% stock is too risky.
Re: Amana Portfolio Allocation
Also, here are the expense ratios (horrendous I know):
AMAGX (Growth) 1.13%
AMANX (Income) 1.20%
AMDWX (Developing) 1.61%
AMAGX (Growth) 1.13%
AMANX (Income) 1.20%
AMDWX (Developing) 1.61%
Re: Amana Portfolio Allocation
Those things are diversfiers or not, depending on exactly what is involved, but don't serve to significantly dilute volatilty of your assets. However, depending on your age, the amount of assets, how long you plan on being in this plan, etc., you could not need fixed income for awhile.Nomadix wrote:Thanks. As bonds are unavailable to me, I'm trying to figure out a fixed-income bond substitute. I've been looking to REIT's, MLP's, and real assets including farmland/ranch land.dbr wrote:It is noted that only these are all stock funds except the third which holds 20% in cash (for now).
It would be a good idea to think about the stock/fixed income distribution and what to do if almost 100% stock is too risky.
The standard question is whether or not you have an adequate emergency fund.
There is the option of investing in I bonds which are tax deferred and inflation indexed. The downside for a young investor is that the tax deferral ends at thirty years, which could be the worst possible time for tax to come due. Another alternative is either tax exempt bonds in a taxable account, or, if your tax rate is not too high, just holding fixed income in taxable. A lot depends on how much income is involved, whether or not you can save in excess of the plan in question (we assume this is some kind of tax deferred retirement plan), whether and how much employer match there is, and so on.
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Re: Amana Portfolio Allocation
What do the Amana folks suggest as a reasonable substitute for bonds? Don' t they offer such product? They must get that question all the time.
Re: Amana Portfolio Allocation
It is a 401 (a). Emergency fund in place.dbr wrote:Those things are diversfiers or not, depending on exactly what is involved, but don't serve to significantly dilute volatilty of your assets. However, depending on your age, the amount of assets, how long you plan on being in this plan, etc., you could not need fixed income for awhile.Nomadix wrote:Thanks. As bonds are unavailable to me, I'm trying to figure out a fixed-income bond substitute. I've been looking to REIT's, MLP's, and real assets including farmland/ranch land.dbr wrote:It is noted that only these are all stock funds except the third which holds 20% in cash (for now).
It would be a good idea to think about the stock/fixed income distribution and what to do if almost 100% stock is too risky.
The standard question is whether or not you have an adequate emergency fund.
There is the option of investing in I bonds which are tax deferred and inflation indexed. The downside for a young investor is that the tax deferral ends at thirty years, which could be the worst possible time for tax to come due. Another alternative is either tax exempt bonds in a taxable account, or, if your tax rate is not too high, just holding fixed income in taxable. A lot depends on how much income is involved, whether or not you can save in excess of the plan in question (we assume this is some kind of tax deferred retirement plan), whether and how much employer match there is, and so on.
Whether in this deferred plan or outside of it, I cannot invest in bonds. I'm relatively young (<30 yo) so fixed income won't be paramount for a while, but I want to start getting a plan in place.
Since the Amana funds are currently the sole make-up of my stock portfolio, I want to make sure that I'm at least balancing those 3 correctly.
Re: Amana Portfolio Allocation
For folks reading this thread: http://en.wikipedia.org/wiki/Sharia_investments
Re: Amana Portfolio Allocation
Not from their target market, they don't.JuanZ wrote:What do the Amana folks suggest as a reasonable substitute for bonds? Don' t they offer such product? They must get that question all the time.
Amana funds invest according to Islamic principals. Charging interest is forbidden, so bonds are out.
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Re: Amana Portfolio Allocation
I am also on the same boat with the OP. I think WISEX could be considered as bond equivalent and ADJEX could provide more US stock exposure. AMDWX could also be used for international exposure.
Based on Morningstar x-ray, each fund's AA is below.
AMANX
Cash 3%
U.S. Stocks 78%
Foreign 19%
AMAGX
Cash 3%
U.S. Stocks 79%
Foreign 18%
ADJEX
Cash 2%
U.S. Stocks 93%
Foreign 3%
WISEX
Cash 36%
U.S. Stocks 13%
Foreign 3%
Bond Eq. 42%
AMDWX
Cash 20%
U.S. Stocks 11%
Foreign 70%
Based on Morningstar x-ray, each fund's AA is below.
AMANX
Cash 3%
U.S. Stocks 78%
Foreign 19%
AMAGX
Cash 3%
U.S. Stocks 79%
Foreign 18%
ADJEX
Cash 2%
U.S. Stocks 93%
Foreign 3%
WISEX
Cash 36%
U.S. Stocks 13%
Foreign 3%
Bond Eq. 42%
AMDWX
Cash 20%
U.S. Stocks 11%
Foreign 70%
Re: Amana Portfolio Allocation
They are just a mutual fund manager, so don't that they advise anything with that regard necessarily, though it would be interesting to see if they have an opinion on the topic.Petunia wrote:Not from their target market, they don't.JuanZ wrote:What do the Amana folks suggest as a reasonable substitute for bonds? Don' t they offer such product? They must get that question all the time.
Amana funds invest according to Islamic principals. Charging interest is forbidden, so bonds are out.
There has been attempts at a bond substitute, although it remains controversial (given their ultimate similarity to bonds):
See: http://en.wikipedia.org/wiki/Sukuk
I believe ultimately the substitution is a lower-risk income/dividend producing assest (the major principles are that there be risk involved and no money made on money), though what the optimal components of that are yet to be determined.
Re: Amana Portfolio Allocation
I would like to point out that AMANX and AMAGX combined only hold about 130 securities. A heavy growth tilt may not be ideal but I would definitely hold equal weights of both funds just to get as much diversification as possible.
Emerging markets at 20% sounds a little high for a portfolio that is all-stock and already very risky, but again, diversification is important, so it makes sense. I think 40/40/20 is a good choice. Either that or go 45/45/10 to reduce volatility a little.
Recognize that no matter what you do, you are going to see a lot of volatility in this portfolio. REITs sound like a good idea. I wouldn't call them a fixed income substitute (too risky) but their low correlation to your current funds may smooth the ride somewhat which is very important in a portfolio like this.
Emerging markets at 20% sounds a little high for a portfolio that is all-stock and already very risky, but again, diversification is important, so it makes sense. I think 40/40/20 is a good choice. Either that or go 45/45/10 to reduce volatility a little.
Recognize that no matter what you do, you are going to see a lot of volatility in this portfolio. REITs sound like a good idea. I wouldn't call them a fixed income substitute (too risky) but their low correlation to your current funds may smooth the ride somewhat which is very important in a portfolio like this.
Re: Amana Portfolio Allocation
Thanks Connya, this is more what I was looking for. Any reason you wouldn't tilt a little more towards AMANX, say 60/30/10connya wrote:I would like to point out that AMANX and AMAGX combined only hold about 130 securities. A heavy growth tilt may not be ideal but I would definitely hold equal weights of both funds just to get as much diversification as possible.
Emerging markets at 20% sounds a little high for a portfolio that is all-stock and already very risky, but again, diversification is important, so it makes sense. I think 40/40/20 is a good choice. Either that or go 45/45/10 to reduce volatility a little.
Recognize that no matter what you do, you are going to see a lot of volatility in this portfolio. REITs sound like a good idea. I wouldn't call them a fixed income substitute (too risky) but their low correlation to your current funds may smooth the ride somewhat which is very important in a portfolio like this.
Re: Amana Portfolio Allocation
retirementandpf wrote:I am also on the same boat with the OP. I think WISEX could be considered as bond equivalent and ADJEX could provide more US stock exposure. AMDWX could also be used for international exposure.
Based on Morningstar x-ray, each fund's AA is below.
AMANX
Cash 3%
U.S. Stocks 78%
Foreign 19%
AMAGX
Cash 3%
U.S. Stocks 79%
Foreign 18%
ADJEX
Cash 2%
U.S. Stocks 93%
Foreign 3%
WISEX
Cash 36%
U.S. Stocks 13%
Foreign 3%
Bond Eq. 42%
AMDWX
Cash 20%
U.S. Stocks 11%
Foreign 70%
retirementandpf, seeing as we are in a similar situation, I'd be interested know your allocations...
Re: Amana Portfolio Allocation
That's fine too, but I don't think you should be too concerned with the growth or value factors. First of all, the difference is less pronounced in larger stocks, and your funds are overweight in large stocks. Second, with so few securities you are less likely to see the trend of the overall market (and the intermittent trend of value outperformance and growth underperformance). I would rather maximize my free lunch of diversification. Also AMANX has a very slightly higher ER.Nomadix wrote:Any reason you wouldn't tilt a little more towards AMANX, say 60/30/10
That being said, I can't imagine 45/45/10 will look much different in the end than 60/30/10, so just pick the one you are most comfortable with.
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Re: Amana Portfolio Allocation
My wife and I are in our mid-30s, so my AA goal is 80/20. I am not there yet at the moment (88/12) but I intend to use new money to reach my desired AA. I also use my taxable brokerage account as my CD equivalent for shorter term needs and as emergency funds. The taxable fund is heavy with WISEX (70%) and has a touch of AMANX and AMAGX (30% combined).Nomadix wrote:retirementandpf wrote:I am also on the same boat with the OP. I think WISEX could be considered as bond equivalent and ADJEX could provide more US stock exposure. AMDWX could also be used for international exposure.
Based on Morningstar x-ray, each fund's AA is below.
AMANX
Cash 3%
U.S. Stocks 78%
Foreign 19%
AMAGX
Cash 3%
U.S. Stocks 79%
Foreign 18%
ADJEX
Cash 2%
U.S. Stocks 93%
Foreign 3%
WISEX
Cash 36%
U.S. Stocks 13%
Foreign 3%
Bond Eq. 42%
AMDWX
Cash 20%
U.S. Stocks 11%
Foreign 70%
retirementandpf, seeing as we are in a similar situation, I'd be interested know your allocations...
Re: Amana Portfolio Allocation
Thanks. With regards to the taxable brokerage account as CD equivalent, does that mean you are just keeping cash in the account or are you putting it into any product?retirementandpf wrote:My wife and I are in our mid-30s, so my AA goal is 80/20. I am not there yet at the moment (88/12) but I intend to use new money to reach my desired AA. I also use my taxable brokerage account as my CD equivalent for shorter term needs and as emergency funds. The taxable fund is heavy with WISEX (70%) and has a touch of AMANX and AMAGX (30% combined).Nomadix wrote:retirementandpf wrote:I am also on the same boat with the OP. I think WISEX could be considered as bond equivalent and ADJEX could provide more US stock exposure. AMDWX could also be used for international exposure.
Based on Morningstar x-ray, each fund's AA is below.
AMANX
Cash 3%
U.S. Stocks 78%
Foreign 19%
AMAGX
Cash 3%
U.S. Stocks 79%
Foreign 18%
ADJEX
Cash 2%
U.S. Stocks 93%
Foreign 3%
WISEX
Cash 36%
U.S. Stocks 13%
Foreign 3%
Bond Eq. 42%
AMDWX
Cash 20%
U.S. Stocks 11%
Foreign 70%
retirementandpf, seeing as we are in a similar situation, I'd be interested know your allocations...
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Re: Amana Portfolio Allocation
I don't hold any cash in the account since it would be subject to earning interest which is not permissible. Therefore, I currently hold 3 funds in my taxable account; WISEX (70%) , AMANX (~20%) and AMAGX (~10%). Our main retirement portfolio, which is a SEP IRA, is heavily in stocks with AMANX, AMAGX and a touch of WISEX.Nomadix wrote:Thanks. With regards to the taxable brokerage account as CD equivalent, does that mean you are just keeping cash in the account or are you putting it into any product?retirementandpf wrote:My wife and I are in our mid-30s, so my AA goal is 80/20. I am not there yet at the moment (88/12) but I intend to use new money to reach my desired AA. I also use my taxable brokerage account as my CD equivalent for shorter term needs and as emergency funds. The taxable fund is heavy with WISEX (70%) and has a touch of AMANX and AMAGX (30% combined).Nomadix wrote:retirementandpf wrote:I am also on the same boat with the OP. I think WISEX could be considered as bond equivalent and ADJEX could provide more US stock exposure. AMDWX could also be used for international exposure.
Based on Morningstar x-ray, each fund's AA is below.
AMANX
Cash 3%
U.S. Stocks 78%
Foreign 19%
AMAGX
Cash 3%
U.S. Stocks 79%
Foreign 18%
ADJEX
Cash 2%
U.S. Stocks 93%
Foreign 3%
WISEX
Cash 36%
U.S. Stocks 13%
Foreign 3%
Bond Eq. 42%
AMDWX
Cash 20%
U.S. Stocks 11%
Foreign 70%
retirementandpf, seeing as we are in a similar situation, I'd be interested know your allocations...
Re: Amana Portfolio Allocation
What is the ideal developing/emerging market equity allocation? Is it necessary? And why?
(trying to understand as oppose to just blindly allocating).
(trying to understand as oppose to just blindly allocating).
Re: Amana Portfolio Allocation
Anyone else in the same boat as me look into WisdomTree ex financial funds,
DOO
DTN
Same to exclude the main culprit (financial sector), but reasonably lower ER's than Amana.
DOO
DTN
Same to exclude the main culprit (financial sector), but reasonably lower ER's than Amana.
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Re: Amana Portfolio Allocation
Thanks for sharing it. Do you currently own them?Nomadix wrote:Anyone else in the same boat as me look into WisdomTree ex financial funds,
DOO
DTN
Same to exclude the main culprit (financial sector), but reasonably lower ER's than Amana.
Re: Amana Portfolio Allocation
Not yet, but looking into it.
Re: Amana Portfolio Allocation
Maybe one day Vanguard will get an ex-Financials fund. Email them it as a suggestion!
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- Joined: Tue Apr 16, 2013 6:34 pm
Re: Amana Portfolio Allocation
This is from another discussion about this topic here: http://www.bogleheads.org/forum/posting ... &p=1738282
I thought it might help for this discussion as well.
I thought it might help for this discussion as well.
JTravers wrote:I know this is quite a few months after the original post, but I hope the OP finds the following information useful.
The best way to invest in Shariah-compliant passive indexes is to open an account at a broker that offers trading on global exchanges at reasonable prices -- Interactive Brokers, Fidelity, Charles Schwab, etc. -- and buy the 3 iShares MSCI Islamic Index ETFs that trade on the London Stock Exchange (LSE).
They are:
1. iShares MSCI World Islamic ETF (ISWD)
2. iShares MSCI USA Islamic ETF (ISUS)
3. iShares MSCI Emerging Markets Islamic ETF (ISEM)
The World ETF contains US stocks, so you have to keep that in mind when setting up your portfolio.
Beyond that, you're stuck with mutual funds with high fees or trying to create portfolios of compliant stocks yourself. For bond-equivalents, the Wise Capital Fund (WISEX) looks interesting, but -- again -- the high fees will make things difficult. Also, only having one unproven fund with your entire fixed income allocation could be asking for trouble.
Re: Amana Portfolio Allocation
retirementandpf, do you know if there is any tax implications for a US-reisdent investor investing in UK-based ETFs such as the iShares ETF mentioned (ISWD - ISUS and ISEM)?
Re: Amana Portfolio Allocation
FYI - new member nihejazi has started a thread asking for help here: UK taxes on iShares ETF offered by Fidelity
nihejazi - Welcome! Consider editing the post in your other thread with the Amana shares you mentioned here. Having all of the information in one location will help us answer your questions. (Use the Edit button in the top right corner of your post.)
nihejazi - Welcome! Consider editing the post in your other thread with the Amana shares you mentioned here. Having all of the information in one location will help us answer your questions. (Use the Edit button in the top right corner of your post.)
Re: Amana Portfolio Allocation
Are individual stocks an option? The expense ratios on those Amana funds are outrageously high.
Re: Amana Portfolio Allocation
So since we last discussed this issue, I've decided to add another fund (AJDEX) to the mix. The idea is to add a mid-cap to this large-heavy collection. We are still at a total of ~232 stocks, but it's what we have to work with.
AMAGX (Large Blend) 1.13% 62 holdings
AMANX (Large Growth) 1.20% 48 holdings
AMDWX (Emerging Mkts) 1.61% 54 holdings
AJDEX (Mid-Cap Growth) 0.99% 68 holdings
If people (particularly those more adept at Morningstar x-ray reverse engineering) again wouldn't mind offering insight as to the best allocation to most closely mimic a total world style-mix, I would be very grateful.
Another fund I considered was IMANX, and while attractive because its offers another 160 stocks in its holdings, I ruled out due to its higher ER (relative here I know), high turnover, and is Large Growth so doesn't really over much diversification to the current mix.
AMAGX (Large Blend) 1.13% 62 holdings
AMANX (Large Growth) 1.20% 48 holdings
AMDWX (Emerging Mkts) 1.61% 54 holdings
AJDEX (Mid-Cap Growth) 0.99% 68 holdings
If people (particularly those more adept at Morningstar x-ray reverse engineering) again wouldn't mind offering insight as to the best allocation to most closely mimic a total world style-mix, I would be very grateful.
Another fund I considered was IMANX, and while attractive because its offers another 160 stocks in its holdings, I ruled out due to its higher ER (relative here I know), high turnover, and is Large Growth so doesn't really over much diversification to the current mix.
Re: Amana Portfolio Allocation
My starting off point is:
40% AMAGX (Large Blend)
40% AMANX (Large Growth)
15% AJDEX (Mid-Cap Growth)
5% AMDWX (Emerging Mkts)
40% AMAGX (Large Blend)
40% AMANX (Large Growth)
15% AJDEX (Mid-Cap Growth)
5% AMDWX (Emerging Mkts)
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Re: Amana Portfolio Allocation
Your targets are here:Nomadix wrote:
If people (particularly those more adept at Morningstar x-ray reverse engineering) again wouldn't mind offering insight as to the best allocation to most closely mimic a total world style-mix, I would be very grateful.
http://www.bogleheads.org/wiki/Approxim ... ock_market
http://www.bogleheads.org/wiki/Approxim ... ock_market
The tool for the job is here:
http://portfolio.morningstar.com/RtPort ... =0.7055475
Given that the composition of the funds will likely change (either from the companies moving around the nine-box or changes to the companies in the funds), this seems like something you'd want to do periodically to watch out for style drift.
In any case, AJDEX isn't showing up. What you have without it is about 76% large caps which is about market proportion.
Anyway, AMAGX and AMANX overlap and you can see that in XRAY under the intersection tab. When data for AJDEX comes through, you may want to check that too if you really care about the true number of stock holdings. It only shows the top holdings though so it isn't complete but will give you an indication of your overlap.
How
Re: Amana Portfolio Allocation
Sorry, that was typo, ticker should have been ADJEX not AJDEX
http://quotes.morningstar.com/fund/adjex/f?t=ADJEX
http://quotes.morningstar.com/fund/adjex/f?t=ADJEX
Re: Amana Portfolio Allocation
Preferred stock might also be an option since it's not a bond.
There are several ETFs such as PFF etc.
Paul
There are several ETFs such as PFF etc.
Paul
...and then Buffy staked Edward. The end.
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Re: Amana Portfolio Allocation
Well personally, and this is just me -- we are likely very different people, I would be more likely to go with:Nomadix wrote:Sorry, that was typo, ticker should have been ADJEX not AJDEX
http://quotes.morningstar.com/fund/adjex/f?t=ADJEX
35% AMAGX (Large Blend)
35% AMANX (Large Growth)
20% ADJEX (Mid-Cap Growth)
10% AMDWX (Emerging Mkts)
My reasons is that number of holdings in each fund is small. AMAGX and AMANX overlap somewhat. Adding more AJDEX and AMDWX would diversify you I think.
You'd end up with a mid cap and growth tilt:
12 . 24. 30
02. 16. 13
01. 01. 01
Since two of your 3/4 funds are growth funds, you are going to have a growth tilt for sure. AMANX is actually slightly tilted value though so I would over weight it a little.
Anyway, since AMDWX is emerging markets maybe it's too much risk for you. 65% of holdings are in the following countries:
United States 14.31
South Africa 11.96
Malaysia 11.54
Indonesia 11.03
China 10.52
Brazil 8.63
Personally, I'd be willing to invest in those countries for international exposure. Europe adds another 11% with Turkey being the major holding at 4.5%.
AMAGX has 8.5% in developed Europe (Denmark, Switzerland, and the Netherlands) and 2.8% in Asia (split between Taiwan and India)
AMANX has 8.70% in developed Europe (U.K. is highest at 3.61% and Switzerland is next) and 2.63% in Taiwan
ADJEX only has Sweden at 1.13%
So overall you'd have 18% internationally.
So finally, with a mid cap and emerging tilt, you may see more volatility than total market. Still, if it were me, I might even boost AMDWX up to 20% and reduce your US holdings a little more.
Most likely I'd go with more in value:
20% AMAGX (Large Blend) --> ACTUALLY THIS IS LARGE GROWTH
45% AMANX (Large Growth) --> REALLY LARGE BLEND BUT HAS A VALUE TILT
20% ADJEX (Mid-Cap Grow)
15% AMDWX (Emerging Mkts)
Gives you 21% international:
15. 26. 27
03. 15. 12
01. 01. 01
AMANX is a dividend fund though so may not be the best in taxable. It seem only about .8% higher than AMAGX though so not such a huge huge difference.
Just for reference 21% international with Vanguard total market funds is:
25. 24. 25
06. 06. 06
03. 03. 02
Re: Amana Portfolio Allocation
Thanks in_reality, exactly the kind of analysis I was looking for!
I definitely would also favor the tilt towards value and the increase in international exposure, particularly as this would be my entire portfolio and I have no international fund so to speak. Even while 21% is still relatively low, it's better than the lower allocation I had.
I am willing to endure the increased volatility at this point given my longer time horizon, but as I age I will probably have to tilt back towards growth, especially since I haven't yet found a bond substitute. The only other hesitation the (relatively) high ER of AMDWX, but given my options I'll have to make due.
Thanks again! Any further suggestions are welcome.
I definitely would also favor the tilt towards value and the increase in international exposure, particularly as this would be my entire portfolio and I have no international fund so to speak. Even while 21% is still relatively low, it's better than the lower allocation I had.
I am willing to endure the increased volatility at this point given my longer time horizon, but as I age I will probably have to tilt back towards growth, especially since I haven't yet found a bond substitute. The only other hesitation the (relatively) high ER of AMDWX, but given my options I'll have to make due.
Thanks again! Any further suggestions are welcome.
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Re: Amana Portfolio Allocation
What about FIA?
I came across it looking for bonds. They follow a Russell index, have a lower ER, have more holdings, include mid-caps and are relativel balanced (though still growth tilted).
It was said they were to indroduce a suitable bond fund 4Q last year but it's not appearing on their page.
Have a look and see what you think.
I like Russell indexes myself. OK thier earlier ones had some problems with front running and whatnot but hey we all learn...
http://khaleejtimes.com/biz/inside.asp? ... onanalysis
I came across it looking for bonds. They follow a Russell index, have a lower ER, have more holdings, include mid-caps and are relativel balanced (though still growth tilted).
It was said they were to indroduce a suitable bond fund 4Q last year but it's not appearing on their page.
Have a look and see what you think.
I like Russell indexes myself. OK thier earlier ones had some problems with front running and whatnot but hey we all learn...
http://khaleejtimes.com/biz/inside.asp? ... onanalysis
Re: Amana Portfolio Allocation
Oh wow, great find! This totally passed me by. Looks like it just got established last October. While I wish the ER was a little more in line with other index funds, I'm glad someone is starting to put out these products!
The only 1.2 mil total assets is a little concerning with regards to its viability, it is still very new so we'll have to wait and see. Either way very exciting and I hope this will be the start of many more similar products in the future.
The only 1.2 mil total assets is a little concerning with regards to its viability, it is still very new so we'll have to wait and see. Either way very exciting and I hope this will be the start of many more similar products in the future.
Re: Amana Portfolio Allocation
New member revaldo29 posted here requesting assistance with his portfolio. I moved the post into a new thread: Amana Portfolio Allocation [Portfolio help]
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Re: Amana Portfolio Allocation
A friend of mine in a similar position asked my thoughts a couple of weeks ago, and I found something that might be a suitable piece of the bond allocation:
http://www.myuif.com/financing/personal ... -accounts/ Profit-sharing earnings would seem to function in a way functionally similar to preferred stock, only with a variable return. The interesting question is whether the share is an equal interest or a superior interest, in terms of the owners' interests.
This would be an interesting site of note as well. http://rizqmanagement.com/ It's rarely updated but sounds like a boglehead trying to figure out this complicated arena.
I've sometimes had clients who require specific investment restrictions in their trust instruments, so this is something that is on the back of my mind, since a big part of my practice is helping clients' estate plans match their values.
Observationally, I've noticed a lot of direct investment in real estate, residential and commercial, along with ownership of precious metals, with these clients. REITs seem like they'd be ruled out, since many projects are built directly on financing.
The other option is to simply play with less money on the table, i.e. having interest-free cash reserves making up the "bond" allocation. It won't provide any benefit against inflation but at least won't be 100% stocks.
http://www.myuif.com/financing/personal ... -accounts/ Profit-sharing earnings would seem to function in a way functionally similar to preferred stock, only with a variable return. The interesting question is whether the share is an equal interest or a superior interest, in terms of the owners' interests.
This would be an interesting site of note as well. http://rizqmanagement.com/ It's rarely updated but sounds like a boglehead trying to figure out this complicated arena.
I've sometimes had clients who require specific investment restrictions in their trust instruments, so this is something that is on the back of my mind, since a big part of my practice is helping clients' estate plans match their values.
Observationally, I've noticed a lot of direct investment in real estate, residential and commercial, along with ownership of precious metals, with these clients. REITs seem like they'd be ruled out, since many projects are built directly on financing.
The other option is to simply play with less money on the table, i.e. having interest-free cash reserves making up the "bond" allocation. It won't provide any benefit against inflation but at least won't be 100% stocks.
Re: Amana Portfolio Allocation
Thank you very much for this. My plan at this stage (I'm 30+ years away from retirement) is to just to hold 10% of assets in cash, but an FDIC insured profit-sharing savings account seems like a great option. Since its FDIC insured, I assume that means the principle is guaranteed? I wonder whats an average return with this type of account.Theoretical wrote:A friend of mine in a similar position asked my thoughts a couple of weeks ago, and I found something that might be a suitable piece of the bond allocation:
http://www.myuif.com/financing/personal ... -accounts/ Profit-sharing earnings would seem to function in a way functionally similar to preferred stock, only with a variable return. The interesting question is whether the share is an equal interest or a superior interest, in terms of the owners' interests.
This would be an interesting site of note as well. http://rizqmanagement.com/ It's rarely updated but sounds like a boglehead trying to figure out this complicated arena.
I've sometimes had clients who require specific investment restrictions in their trust instruments, so this is something that is on the back of my mind, since a big part of my practice is helping clients' estate plans match their values.
Observationally, I've noticed a lot of direct investment in real estate, residential and commercial, along with ownership of precious metals, with these clients. REITs seem like they'd be ruled out, since many projects are built directly on financing.
The other option is to simply play with less money on the table, i.e. having interest-free cash reserves making up the "bond" allocation. It won't provide any benefit against inflation but at least won't be 100% stocks.
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Re: Amana Portfolio Allocation
I have no idea about the return, but they do list that the principal is guaranteed in the FAQs. They mention home and commercial mortgages, so it would likely be a mix of mortgage-backed securities and small business loans. http://www.myuif.com/financing/personal ... ing-works/. It's a very interesting approach to banking.revaldo29 wrote:Thank you very much for this. My plan at this stage (I'm 30+ years away from retirement) is to just to hold 10% of assets in cash, but an FDIC insured profit-sharing savings account seems like a great option. Since its FDIC insured, I assume that means the principle is guaranteed? I wonder whats an average return with this type of account.Theoretical wrote:A friend of mine in a similar position asked my thoughts a couple of weeks ago, and I found something that might be a suitable piece of the bond allocation:
http://www.myuif.com/financing/personal ... -accounts/ Profit-sharing earnings would seem to function in a way functionally similar to preferred stock, only with a variable return. The interesting question is whether the share is an equal interest or a superior interest, in terms of the owners' interests.
This would be an interesting site of note as well. http://rizqmanagement.com/ It's rarely updated but sounds like a boglehead trying to figure out this complicated arena.
I've sometimes had clients who require specific investment restrictions in their trust instruments, so this is something that is on the back of my mind, since a big part of my practice is helping clients' estate plans match their values.
Observationally, I've noticed a lot of direct investment in real estate, residential and commercial, along with ownership of precious metals, with these clients. REITs seem like they'd be ruled out, since many projects are built directly on financing.
The other option is to simply play with less money on the table, i.e. having interest-free cash reserves making up the "bond" allocation. It won't provide any benefit against inflation but at least won't be 100% stocks.
Re: Amana Portfolio Allocation
in_reality wrote:What about FIA?
I came across it looking for bonds. They follow a Russell index, have a lower ER, have more holdings, include mid-caps and are relativel balanced (though still growth tilted).
It was said they were to indroduce a suitable bond fund 4Q last year but it's not appearing on their page.
Have a look and see what you think.
I like Russell indexes myself. OK thier earlier ones had some problems with front running and whatnot but hey we all learn...
http://khaleejtimes.com/biz/inside.asp? ... onanalysis
Any thoughts on investing in a new index fund with so few assets? FIA is, as far as I know, is the only passively managed index fund offered to Muslim investors in the states and has the lowest ER at .7. Now that the fund has been operational for a few months, can someone outline the risks of investing in a fund with so few assets (about 1.3 million)? Also, the find holds about 400 securities, so I assume it is more diversified than the two Amana funds.?
Re: Amana Portfolio Allocation
Been quite some time but wanted to revisit this as there is now at least one new product that should appeal to us bogleheads looking for shariah compliant options, specifically a SC passive index ETF ticker HLAL
ER still a bit high at 0.5%, but a move in the right direction plus only passive option.
Any advice on how to build portfolio that approximates total market now that this fund is available? Go all in on HLAL or is there value to mixing in Amana funds as well?
ER still a bit high at 0.5%, but a move in the right direction plus only passive option.
Any advice on how to build portfolio that approximates total market now that this fund is available? Go all in on HLAL or is there value to mixing in Amana funds as well?
in_reality wrote: ↑Sat Jan 10, 2015 5:37 amWell personally, and this is just me -- we are likely very different people, I would be more likely to go with:Nomadix wrote:Sorry, that was typo, ticker should have been ADJEX not AJDEX
http://quotes.morningstar.com/fund/adjex/f?t=ADJEX
35% AMAGX (Large Blend)
35% AMANX (Large Growth)
20% ADJEX (Mid-Cap Growth)
10% AMDWX (Emerging Mkts)
My reasons is that number of holdings in each fund is small. AMAGX and AMANX overlap somewhat. Adding more AJDEX and AMDWX would diversify you I think.
You'd end up with a mid cap and growth tilt:
12 . 24. 30
02. 16. 13
01. 01. 01
Since two of your 3/4 funds are growth funds, you are going to have a growth tilt for sure. AMANX is actually slightly tilted value though so I would over weight it a little.
Anyway, since AMDWX is emerging markets maybe it's too much risk for you. 65% of holdings are in the following countries:
United States 14.31
South Africa 11.96
Malaysia 11.54
Indonesia 11.03
China 10.52
Brazil 8.63
Personally, I'd be willing to invest in those countries for international exposure. Europe adds another 11% with Turkey being the major holding at 4.5%.
AMAGX has 8.5% in developed Europe (Denmark, Switzerland, and the Netherlands) and 2.8% in Asia (split between Taiwan and India)
AMANX has 8.70% in developed Europe (U.K. is highest at 3.61% and Switzerland is next) and 2.63% in Taiwan
ADJEX only has Sweden at 1.13%
So overall you'd have 18% internationally.
So finally, with a mid cap and emerging tilt, you may see more volatility than total market. Still, if it were me, I might even boost AMDWX up to 20% and reduce your US holdings a little more.
Most likely I'd go with more in value:
20% AMAGX (Large Blend) --> ACTUALLY THIS IS LARGE GROWTH
45% AMANX (Large Growth) --> REALLY LARGE BLEND BUT HAS A VALUE TILT
20% ADJEX (Mid-Cap Grow)
15% AMDWX (Emerging Mkts)
Gives you 21% international:
15. 26. 27
03. 15. 12
01. 01. 01
AMANX is a dividend fund though so may not be the best in taxable. It seem only about .8% higher than AMAGX though so not such a huge huge difference.
Just for reference 21% international with Vanguard total market funds is:
25. 24. 25
06. 06. 06
03. 03. 02
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Re: Amana Portfolio Allocation
If these are in a tax deferred plan, the expense ratios are likely costing you more money than the tax benefit. I would only consider these to the extent up to any match your employer offers and I would open an account for Roth, IRA and or taxable with Fidelity, Vanguard or Schwab.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
Re: Amana Portfolio Allocation
How about HLAL?
Re: Amana Portfolio Allocation
Also looks like there is another option now - SPUS