March 23, 2012, Update on Bob Brinker's Newest Model Portfolio Fund: AKREX

March 23, 2012....Bob Brinker made some changes in his three model portfolios as of January 11, 2012.

One of the changes he made was to sell  a percentage of Vanguard Total Stock Market Fund weightings (VTSMX) and buy Akre Focus Fund (AKREX).

Last January, I did a briefing on this fund, and made the statement that it looked like Bob Brinker was trying to "beat the market" with these changes. So how is it going so far?  According to this chart, Bob added a lot of risk to his portfolios with no added reward, yet anyway.

Akre Focus is a very new mid-cap growth fund -- less than 3 years old.  It has less than $450 million in assets and a 25% turnover. AKRE has much less diversity with only 25 stocks, whereas, there are 3344 stocks in the VanguardTotal Stock Market Fund.

Bob has always taught listeners to keep expenses down to a minimum,  but surprisingly,  AKREX has  a very high expense ratio (1.45%) and a 12b1 fee.

Also, Bob has always recommended limiting exposure in any single stock to only 4% of one's total portfolio. Akre Focus Fund's top ten holdings are much more than that -- some as much as 12%.

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January 21, 2012, Bob Brinker Increases Risk in Marketimer Portfolios

January 21, 2012.....Bob Brinker fans have known for years that Brinker recommends Vanguard Ginnie Mae Fund (VFIIX), but he has lowered holdings in that fund and increased the risk in his income and balanced portfolios.

 1. Brinker has told Moneytalk listeners that he  includes the Vanguard High-Yield Bond Fund (VWEHX) in his income portfolio and talked about how well they have done. 

 Last Sunday on Moneytalk, Bob Brinker told a caller that he added Double Line Total Return Fund to his income portfolio because he thinks that Jeffrey Gundlach is the best bond manager in the world today: ".....the fund has had an outstanding record. The reason for that, it is my opinion that the fund manager on that fund is the best there is out there in the world income investing....That's why I added that fund to my income portfolio." 

 2. Double Line is invested in 26%  BELOW-B  rated bonds.

 Another risk increase happened when Brinker  lowered the percentage of bond holdings in his "balanced" portfolio III by adding the Vanguard Wellesley Income Fund a year ago. 

 3. The Wellesley Fund is invested in 35% equities. That brings  Brinker's "balanced" portfolio to more than 50% weighted in equities.

 Now here in January 2012, Brinker increased risk in all three model portfolio by adding the Akre Focus Retail Fund (AKREX).

 4. Akrex Fund is more risky than the Vanguard Total Return Fund that it replaced because it lacks diversity.   It also breaks Brinker's 4% rule in most of its top-ten holdings -- the top-ten holdings represent 63% of total holdings, and  the top three are almost 10% of the fund. 

Brinker is  still very bullish and expects equities to do better than bonds this year: "My expectation is that right now, the equity portion, the equity portfolios are in a better position in terms of their total return potential than the fixed income..."

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January 12, 2012, Bob Brinker's New Marketimer Fund: Akre Focus Retail Fund

January 12, 2012....As of  the market close yesterday, Bob Brinker added the Akre Focus Retail Fund (AKREX) to his Marketimer Model Portfolios I, II and III. 

Bob Brinker broke some of his own long-standing  rules with these changes and has added risk to all of his model portfolios.  He sold all of Barons Partners  (BPTRX) in model portfolio I, and percentages of Vanguard Total Stock Market Fund in  model portfolio II and III, in order to purchase the Akre Focus Fund.  That lowers each Marketimer portfolio diversification by a huge factor. There are only 25 stocks in the Akre Fund and 3344 stocks in the VanguardTotal Stock Market Fund.

Akre Focus is a mid-cap growth fund and is only 2 1/2 years old. It has less than $450 million in assets and a 25% turnover.

Even though Bob has always taught listeners to keep expenses down to a minimum, and recommended Vanguard Funds for that reason, AKREX has  a very high expense ratio (1.45%) and a 12b1 fee.

Also, Bob has always recommended limiting exposure in any one stock to only 4%  of one's total investment portfolio. However, Akre Focus Fund's top ten holdings are all much more than that -- and the top two holdings are almost 12% each:

Mastercard Incorporated Common [11.77%]
Dollar Tree, Inc. [11.66%]

It looks like Brinker is hoping to "beat the market" with these moves. But why did he wait until now to jump on the Akre Focus Fund band-wagon? There was lots of publicity about it BEFORE it gained 25% in the past couple of years. AKREX was up 11.9% in 2011:




In recent years, Bob Brinker has made several moves that are not typical of his advice over the years of Money Talk. Things like adding  GLD to his list of recommended stocks and recommending a high-yield fund or adding stock to his fixed-income portfolio. One might even question whether the Bob Brinker who is now making decisions for Market Timer is the same man who has been on the air for over 26 years.

Bob's son began publishing a fixed-income newsletter about six years ago. Since then, most people get him confused with the talk show host because he makes no effort to distinguish himself on the internet now that he is in the same business as his father. He is known as "Bob Brinker" too.

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