Two of the latest positions in our model portfolio are diversified funds in which the managers can change the allocations among different types of assets, explains Bob Carlson, editor of Retirement Watch.

PIMCO All Asset (PASDX)

PIMCO All Asset has an excellent long-term history; manager Rob Arnott uses quantitative models, primarily valuation-based, to move the portfolio among most of the funds offered by PIMCO.

In 2013, he moved away from US stocks and bonds and toward emerging market assists. He was early, which often is the case with this fund, but so far in 2014 the move is paying off.

The fund recently was a little over 1% in US stocks and 5% in US bonds. Meanwhile it is over 24% in emerging market and global bonds and 22% in global stocks. Though the fund stumbled in 2013, gaining only 0.29%, it is returning to form this year and is up over 6% year to date.

Bridgeway Managed Volatility (BRBPX)

Bridgeway Managed Volatility has more limited authority. It seeks high returns with much less volatility than the stock indexes. It does that by shifting between stocks, bonds, and cash.

At least 25% of the fund will be invested in stocks and up to 75% can be in stocks. The stocks are selected using the proprietary stock selection model used in Bridgeway's equity funds. This system changes stock holdings based on market conditions.

To reduce volatility, the fund changes its bond and cash allocation. In addition, the fund might write options against its stocks. Recently, the fund was 43% in cash, 56% in stocks, and the rest in other assets or options strategies.

In recent years, cash has been as high as 73% in 2012 and as low as 33% in 2011. Stocks ranged from 26% to 66%. The fund has returned 5.14% year to date.

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