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Post by FD1000 on Jul 15, 2021 16:03:24 GMT -5
I don't use 3 years as my yard stick for making investing decisions, and I have not promoted any poster to use it. This most recent conversation was about your promotion of HY Munis because of very recent performance of HY Munis. I simply noted that other categories also have had hot performance in that similar performance period. Categories have hot performance periods, and poor performance periods, and when you look at performance charts over a longer period of time (such as 3 years), you can have a better idea what those fund options/fund categories might be for your personal investing process. If you are looking to make a fund decision, you have to apply your criteria for fund selection that works for you, not necessarily what has been working for the OP of the thread. I am done with this topic of discussion and do not intend to make anymore comments about the greatness of HY Munis. Here is the bottom line: HY Munis was the best category, not including specialized Multi, for 3 months + YTD. They started the year very well, then down for about 2 weeks in February and since then just climbing up nicely. Several made 5+% YTD, shorter duration NVHAX made 7%, even the most conservative VWALX mad 4+% which is excellent in bond land. Show me any bond investor who would not be happy with 5+% YTD.Sure, core plus also did well in the last 3 months, but far behind HY Munis and most lost money YTD. As usual, I'm not promoting anything, just stating facts. HY Munis or any other fund/category can go down small/high % at any time. Posters can do whatever. |
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Post by pn on Jul 15, 2021 18:58:42 GMT -5
Looking at a few old favorites -
1 month TR
IISIX -0.42
JMSIX -0.11
VCFIX +0.53
VCFIX is now open/no fee at Schwab and has been doing OK recently |
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Post by gary1952 on Jul 16, 2021 7:07:24 GMT -5
I look at those too once in awhile. Why?
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Post by fred495 on Jul 16, 2021 10:36:13 GMT -5
FD said: "Show me any bond investor who would not be happy with 5+% YTD." Besides NVHAX and RCTIX, I am also using OSTIX in my portfolio, a short term, high yield bond fund that hasn't been mentioned on this board. While its YTD total return is "only" 4.2%, its 3, 5, 10 and 15 year returns range consistently between 5 and 6%. The fund's average effective duration is currently 1.9, and the standard deviation 5.7. M* rates the fund's risk as "low".
Also, per M*: "Osterweis Strategic Income is a unique high-yield offering with a strong risk-adjusted return profile, particularly over the longer term."
As a conservative and retired investor, I am quite happy with OSTIX's consistent performance over the past 15 years. Fred
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Post by FD1000 on Jul 16, 2021 16:57:57 GMT -5
FD said: "Show me any bond investor who would not be happy with 5+% YTD." Besides NVHAX and RCTIX, I am also using OSTIX in my portfolio, a short term, high yield bond fund that hasn't been mentioned on this board. While its YTD total return is "only" 4.2%, its 3, 5, 10 and 15 year returns range consistently between 5 and 6%. The fund's average effective duration is currently 1.9, and the standard deviation 5.7. M* rates the fund's risk as "low". As a conservative and retired investor, I am quite happy with OSTIX's consistent performance over the past 15 years. Fred As usual, a good find. Take a look at ICMUX, the 2 managers started at the end of 2018, beginning of 2019. Mark Travis, President and CEO of Intrepid Capital used to managed it and then came back. Much better YTD, good 3 years too but OSTIX one month is better. ICMUX 12 month yield is over 6%, in the last 2 months it's down but still at 5.5% annually while OSTIX=3.9%. More info( link). Unique funds with only about 50-55 holdings, mostly in corp bonds at duration about 3.1. Higher yield with bond funds may have an advantage but you can't disregard the other stuff. I would also look at SEMMX. As you know, I don't pay a lot of attention to March 2020(the black swan). For one month: RCTIX+ICMUX are flat while OSTIX+SEMMX are up 0.9% Attachments:
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Post by DT on Jul 17, 2021 21:51:19 GMT -5
FD said: "Show me any bond investor who would not be happy with 5+% YTD." Besides NVHAX and RCTIX, I am also using OSTIX in my portfolio, a short term, high yield bond fund that hasn't been mentioned on this board. While its YTD total return is "only" 4.2%, its 3, 5, 10 and 15 year returns range consistently between 5 and 6%. The fund's average effective duration is currently 1.9, and the standard deviation 5.7. M* rates the fund's risk as "low".
Also, per M*: "Osterweis Strategic Income is a unique high-yield offering with a strong risk-adjusted return profile, particularly over the longer term."
As a conservative and retired investor, I am quite happy with OSTIX's consistent performance over the past 15 years. Fred
Fred, thanks for your comments on OSTIX. I have not owned this fund for the last few years, but at one time I held it for a couple of years. I do recall some frustration, I had in the past, because OSTIX has an income distribution system, that uses quarterly distributions, and I traditionally have preferred monthly distribution funds. Also, I think it once had a short term redemption penalty on new share purchases, but I think it dropped that redemption penalty a few years ago. When I owned it, OSTIX was known for managing risk through short duration, and also picking companies with strong cash flow positions. I like funds in which their managers make major personal investments in funds they manage, and OSTIX managers satisfy that criteria with their major investments in the fund. I don't recall why I sold this fund, but your comments makes me want to do some additional due diligence on it, as it has been off my radar since I sold it. |
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Post by DT on Jul 19, 2021 8:54:37 GMT -5
FD said: "Show me any bond investor who would not be happy with 5+% YTD." Besides NVHAX and RCTIX, I am also using OSTIX in my portfolio, a short term, high yield bond fund that hasn't been mentioned on this board. While its YTD total return is "only" 4.2%, its 3, 5, 10 and 15 year returns range consistently between 5 and 6%. The fund's average effective duration is currently 1.9, and the standard deviation 5.7. M* rates the fund's risk as "low".
Also, per M*: "Osterweis Strategic Income is a unique high-yield offering with a strong risk-adjusted return profile, particularly over the longer term."
As a conservative and retired investor, I am quite happy with OSTIX's consistent performance over the past 15 years. Fred
Fred, out of curiosity, I was wondering how you prioritize your criteria for fund selection. For a few weeks, not too long ago, it appeared your were poised to add CLMAX to your portfolio. It has been one of the most hyped funds on this thread, but for the past 3 months it has been a very poor performer. However, if you look at its YTD and one year total return, it has very strong statistical returns. You "apparently" have chosen OSTIX over CLMAX--OSTIX is the better performer on a short term basis, but CLMAX is the better performer on a YTD and 1 Yr basis. You still hold RCTIX which has been very good on a YTD basis, but not so good in the past 3 months. So, I am just curious about your criteria on how you choose to select new funds, your criteria for continuing to hold funds, and on how you incorporate shorter term performance of 3 months or less with longer term performance of YTD or 1 year? |
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Post by fred495 on Jul 20, 2021 13:41:13 GMT -5
Hi dt,
I have a dynamic list of funds that I try to follow on a daily basis, more or less. CLMAX, OSTIX and RCTIX were on that list. So, they are not necessarily funds that are new to me; I have selected them for my watch list over time because they met my comfort level with respect to their risk/reward attributes, or they have some unique characteristic that may have some diversification benefit.
With respect to bond funds, I usually make changes to my portfolio holdings if I believe there are some significant market forces at work that may impact the current interest rate/inflation environment. I became interested in CLMAX after reading articles that made a rather convincing case that interest rates would be going up in the near future and CLMAX was a fund that was positioned to benefit from this development. Obviously, that prediction turned out to be wrong, at least in the short term. Hence, my choice of OSTIX, at this time. M* says it's "a unique high-yield offering with a strong risk-adjusted return profile, particularly over the longer term."
In general, I would say that I prefer bond funds that have a somewhat consistent risk/reward performance over the past 1 to 3 years, or longer, rather than look at shorter term performance of 3 months or less. Like you, I am also not a good trader, but neither am I a buy-and-hold investor.
Since my retirement, I have found the advice of another poster always very helpful: "I don't really need a lot more money - but I certainly don't want to lose a lot. I need to remind myself to err on the side of caution."
Good luck,
Fred
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Post by DT on Jul 20, 2021 17:56:03 GMT -5
Fred, thanks for the clarification. Best wishes on your fund selections. Do you have EIXIX on your watchlists? It is an old favorite of FDs, which I would expect you to like, but you have never mentioned it?
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Post by fred495 on Jul 20, 2021 19:37:47 GMT -5
Fred, thanks for the clarification. Best wishes on your fund selections. Do you have EIXIX on your watchlists? It is an old favorite of FDs, which I would expect you to like, but you have never mentioned it? No, I don't have EIXIX on my watchlist. It's a rather new fund, less than a 3 year track record, and I have no idea what its the average credit quality or duration is. It also raises a red flag for me with a suspiciously high SEC yield of 5.49%, according to M*. I will need more information before I would consider adding it to my watch list. But, thanks, anyway, dt. And, of course, good luck with your fund selections during this uncertain market environment. Always good to hear from you. Appreciate your thoughtful and valuable comments and suggestions. Fred |
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Post by pn on Jul 20, 2021 21:55:15 GMT -5
Fred, glad to hear that you avoided making the plunge into CLMAX, which has not been a pleasant experience over the last few months.
I bought in a little over 3 months ago, and my original purchase is now down 7 cents a share, and most of the auto-reinvestments are down more.
The trend in interest rates lately has been down, and although it doesn’t seem rational for that trend to continue – don’t put yourself in a position where the market can remain irrational for longer than you want to sustain losses. Personally, I’m hanging in there, but I would offer the following for anyone thinking of buying:
Look at the amount of your investments that will lose principal with interest rates going up and right size your investment to that amount. |
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Post by DT on Jul 21, 2021 8:44:18 GMT -5
Fred, thanks for the clarification. Best wishes on your fund selections. Do you have EIXIX on your watchlists? It is an old favorite of FDs, which I would expect you to like, but you have never mentioned it? No, I don't have EIXIX on my watchlist. It's a rather new fund, less than a 3 year track record, and I have no idea what its the average credit quality or duration is. It also raises a red flag for me with a suspiciously high SEC yield of 5.49%, according to M*. I will need more information before I would consider adding it to my watch list. But, thanks, anyway, dt. And, of course, good luck with your fund selections during this uncertain market environment. Always good to hear from you. Appreciate your thoughtful and valuable comments and suggestions. Fred Fred, I am very reluctant these days, to take strong positions on what to invest in. I have many many watchlists, primarily organized by M* categories of funds. My watchlists are organized so I can quickly compare funds, and see how they are performing in varying time periods, both short and longer. Since I am a Schwab brokerage client, I use what is available through Schwab, and prioritize using Institutional share classes of available funds. In 2021, I periodically trade a bit, but I have held many funds for the entire 2021 period, while staying fully invested. Although we do vary a bit in our investment selections, I do think we have many similar criteria for fund selection, and so I do look forward to hearing what you are doing in fund selections. I find myself becoming more of a "core and explore" investor in 2021. My core funds are relatively low risk funds, that held up well in the 2020 crash, but I have a few more speculative funds that I use in a trading effort. SEMMX is a "speculative fund" that I have been using for the past few months, but I don't trust it as a core holding, so I maintain a high level of readiness to sell it quickly. FPFIX is a core holding for me, and I use it exclusively in my taxable account to produce slightly better yield and total return than what I could get from my high yield banking account. I take more risk in my IRA and look for greater total return than in my taxable account--that is where I hold SEMMX as a "trade" selection. I don't encourage, or recommend, any of these funds for anyone else, but I know them very well, and I am very comfortable in my investment approach for my portfolio objectives. |
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Post by fred495 on Jul 21, 2021 23:42:46 GMT -5
Hi dt,
I try to keep it simple and only keep watchlists for the following four general fund categories; each category usually consists of approx. 3 to 6 funds:
- Alternative Funds
- Balanced & Equity Funds
- Bond Funds
- Muni Funds
My account is not at Schwab, but I have found MFO's QuickSearch Tool very helpful in my fund selection process.
I currently have only three bond funds in my portfolio (OSTIX, RCTIX and NVHAX); they make up 35% of my portfolio. I have 50% in a balanced fund (VWINX) and three alternative funds (ARBIX, CTFAX and JHQAX), and the remaining 15% is in cash. As you say, we do vary a bit in our investment selections, probably because I don't have to touch my portfolio to cover any daily living expenses.
All in all, I consider my portfolio fairly conservative and appropriate to my needs and objectives during these rather uncertain times. It lets me sleep well at night. I am satisfied with an annual total return of around 3-6%.
Good luck,
Fred
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Post by DT on Jul 22, 2021 6:38:40 GMT -5
Hi dt, I try to keep it simple and only keep watchlists for the following four general fund categories; each category usually consists of approx. 3 to 6 funds: - Alternative Funds - Balanced & Equity Funds - Bond Funds - Muni Funds My account is not at Schwab, but I have found MFO's QuickSearch Tool very helpful in my fund selection process. I currently have only three bond funds in my portfolio (OSTIX, RCTIX and NVHAX); they make up 35% of my portfolio. I have 50% in a balanced fund (VWINX) and three alternative funds (ARBIX, CTFAX and JHQAX), and the remaining 15% is in cash. As you say, we do vary a bit in our investment selections, probably because I don't have to touch my portfolio to cover any daily living expenses. All in all, I consider my portfolio fairly conservative and appropriate to my needs and objectives during these rather uncertain times. It lets me sleep well at night. I am satisfied with an annual total return of around 3-6%. Good luck, Fred Fred, very interesting. We vary in our investing approach a bit more than I expected. Not having to touch/depend on your portfolio for daily living expenses, as well as major living expenses, can be a big factor in fund choices. Best wishes on your investing results! |
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Post by fred495 on Jul 22, 2021 8:30:10 GMT -5
Hi dt,
Just decided to run my portfolio through Portfolio Visualizer and found that, at least during the past four years, the results conform to my conservative, "sleep well at night" comfort level:
- Compound Annual Growth Rate (CAGR) 6.8%
- Worst Year 0.8%
- Max. Drawdown -4.2%
- Std. Deviation 3.74%
- Sharpe 1.42
- Sortino 2.38
Wish you the best in your fund selections and investment results.
Fred
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Post by DT on Jul 23, 2021 12:40:41 GMT -5
Hi dt, Just decided to run my portfolio through Portfolio Visualizer and found that, at least during the past four years, the results conform to my conservative, "sleep well at night" comfort level: io - Compound Annual Growth Rate (CAGR) 6.8% - Worst Year 0.8% - Max. Drawdown -4.2% - Std. Deviation 3.74% - Sharpe 1.42 - Sortino 2.38 Wish you the best in your fund selections and investment results. Fred Seems like you have your portfolio criteria, and fund selection criteria, set up to meet your investing objectives. In my younger years, I was a pretty aggressive mutual fund investor, using sector equity funds, lots of international and EM funds, and several growth and value funds, for different size companies. Small cap value mutual funds use to be my favorite category, along with mid cap value mutual funds. As I got closer to retirement, I started getting more conservative, and I focused on "lower risk" allocation funds--VWINX, BERIX, PRCWX, PRSNX, etc. When I moved into retirement, I got even more conservative, focusing on a variety of bond oefs, some of which I defined as "equity-like", but many that were focused on income and yield, and ballast funds. I don't attempt to keep up with allocation funds much anymore, never used "alternative" bond oefs, but have moved more toward FDs investing style, with a mixture of core longer term bond oef holdings and some more risky bond oef trade options. Since I am now a preservation of asset investor, I don't attempt to win any total return contests anymore. I am 73 and don't care for a lot volatility and roller coaster rides anymore, but do focus on modest total return performance that allows me to recoup my RMD distributions each year. Fortunately, I have not had any major expenditure issues for the past few years, and my taxable account is growing each year due to my investing RMDs in that account each year. My wife and I are now increasing our gifting of assets to our adult children in increasingly large amounts each year, so our focus is to do more sharing of our investments with family members now. Based on my understanding of your portfolio, I probably don't have much to offer you for most of your portfolio. Occasionally, I may be able to contribute to your bond oef options, but it sounds like you are finding what you value in bond oefs without need for much assistance from others. I appreciate your being open and sharing what you are doing, and I suspect you will keep doing very well in your future selections. |
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Post by fred495 on Jul 23, 2021 22:51:45 GMT -5
dt said: "Since I am now a preservation of asset investor, I don't attempt to win any total return contests anymore. I am 73 and don't care for a lot volatility and roller coaster rides anymore, but do focus on modest total return performance" [...]
I am a bit older than you, dt, but I quite agree with your above "mission" statement. That's why I keep quoting what another poster said a while ago on another discussion forum: "I don't really need a lot more money - but I certainly don't want to lose a lot. I need to remind myself to err on the side of caution."
Perhaps the fact that I don't need to tap into my portfolio to defray daily living expenses allows me to venture outside the bond fund universe. With interest rates at historic lows and the rather limited upside potential for most bond funds, I feel actually quite comfortable at this time accessing some conservative alternative funds, like ARBIX, CTFAX and JHQAX, that have excellent risk/reward profiles over the longer term. Even though, 50% of my portfolio consists of bond and MM funds. So, your comments and suggestions in the fixed income category are always welcome. Besides you and FD, very few posters come to mind that contribute much anymore in this specific area. Seems like FD has also significantly cut back on his bond fund postings. I especially miss his monthly bond fund table and the associated comments.
By the way, I find Lynn Bolin's posts and articles at MFO and at Seeking Alpha very helpful. He analyses and discusses defensive funds and writes well researched articles such as "Building Downside Protection for Retirees", for example.
Anyway, good luck and all the best,
Fred
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Post by DT on Jul 25, 2021 14:08:44 GMT -5
Here are a few Bond OEFs, which have caught my attention recently:
1. PUCZX (PGIM Strategic Bond)--It is rated as a Abov Av. Risk Multisector bond oef according to M*, with a Bronze medalist rating. It got clobbered in 2020 crash, and has struggled to recoup those losses in 2021. Its portfolio is made up of 10% Govt, 34% Corp, 21% Securitized, and 33% derivatives. Even though its YTD performance is anemic (under 2%), it is showing some strong short term momentum making it a potential trade consideration: 1 mo TR of 1.08% and 3 mo. TR of2.45%. It was a very popular fund in 2019 and in early 2020, and it may be returning to its better long term performance pattern. If you are into momentum based trade options, this fund averages over 6% longer term and has recently shown strong short term momentum.
2. BMPAX (Blackrock Mortgage Opportunities)--It is rated as a Low Risk Multisector bond oef according to M*. It has had some recent strong performance with .88% TR for 1 Mo, 1.60% TR for 3 Mo., 2.11% TR for YTD, and 5.64% TR for 1 yr. It has 60% of its portfolio in investment grade bonds, and its low risk portfolio has 66% in securitized assets, 6% in Govt, and 27% in cash. This low risk multisector bond oef has had good consistency, averaging about 5% over a longer period.
3. FADMX (Fidelity Strategic Income)--It is an Average Risk Multisector Bond oef according to M*, with some good recent performance. It has a 1 Mo TR of .89%. 3 Mo TR of 2.14%, and YTD TR of 3.34%. It has 36% of its portfolio in Govt, 53% in Corp, and 10% in cash. This is pretty well known multisector bond oef, with a ton of longer term managers. It is a solid multisector bond oef, showing some short term momentum
4. MNCPX (Manning and Napier Unconstrained Bond)--It is a Low Risk NonTraditional Bond oef according to M*, with some good overall performance both short and longer term. It has 71% of its portfolio in Investment Grade bonds. Its portfolio has 4.58% in Govt, 46% in Corp, 43% in Securitized, and 6% in Cash. Its TR for 1 Mo is .51%, 1.46% for 3 Mo, 2.69% for YTD, and 7.16% for 1 yr. This is a very solid low risk nontraditional bond oef, with excellent managers, and showing solid recent short term performance, to go along with its longer term solid total return.
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Post by yogibearbull on Jul 25, 2021 14:56:59 GMT -5
FADMX is a solid middle of the road MS funds with neutral weights ".....high-yield bonds (40%), floating-rate debt (5%), emerging-markets debt (15%), U.S. government and investment-grade debt (25%), and foreign developed-markets debt (15%).....". So, it won't bet too heavily on MBS (agency or nonagency) or HY or ?? as some MS tend to do at times.
Team now includes (from M* Analyst Report 8/25/20 that may be a bit outdated) ".....Ford O’Neil (also core-plus FTBFX, FMSDX) has worked as a generalist coordinating across the various sleeves of the portfolio. He originally collaborated in this capacity with long-tenured comanager Joanna Bewick, but following her expected retirement, he was joined by Adam Kramer (also FMSDX) in mid-2017. That isn’t the only leadership addition in recent years. Sean Corcoran (securitized debt; also FGMNX, FMSFX) and Timothy Gill (emerging-markets debt; also FNMIX) were both added to their respective sector sleeves in 2018. Rose McMellin and Ario Emami Nejad took the reins of the developed non-U.S. sleeve following the retirement of David Simner in early 2019, with Rick Patel replacing McMellin in April 2020 as she became director of portfolio management for Fidelity’s international fixed-income division. They join Mark Notkin (also FAGIX, FLVCX) and Jonathan Kelly, who have been responsible for the high-yield and emerging-markets debt sleeves for roughly two decades each, and Franco Castagliuolo (also FGMNX, FMSFX), who has spent a decade as the lead of the mortgage sleeve."
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Post by fred495 on Jul 25, 2021 18:19:58 GMT -5
dt said: "PUCZX (PGIM Strategic Bond)-- [...] got clobbered in 2020 crash, and has struggled to recoup those losses in 2021. [...] Even though its YTD performance is anemic (under 2%), it is showing some strong short term momentum making it a potential trade consideration: 1 mo TR of 1.08% and 3 mo. TR of 2.45%. It was a very popular fund in 2019 and in early 2020, and it may be returning to its better long term performance pattern."
dt, I owned shares in this fund until the 2020 market crash when it lost 11.7% in March. It is now, as you say, "showing some strong short term momentum". But, with a "moderate" interest rate sensitivity, according to M*, and an average effective duration of 5.8, it is not surprising that while yields climbed sharply in the first quarter of 2021, PUCZX lost 2.6%. However, now that the reverse is happening, and yields have been dragged down in recent months, perhaps one shouldn't be surprised at the fund's "strong short term momentum".
I don't know if this fund "may be returning to its better long term performance pattern." Unless the managers are flexible and make appropriate changes to the fund, interest rates will have to continue to go lower in the future to support PUCZX's continued positive momentum.
At this time, I feel more comfortable holding bond funds with "limited" interest rate sensitivity.
Fred
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Post by DT on Jul 25, 2021 19:03:53 GMT -5
dt said: "PUCZX (PGIM Strategic Bond)-- [...] got clobbered in 2020 crash, and has struggled to recoup those losses in 2021. [...] Even though its YTD performance is anemic (under 2%), it is showing some strong short term momentum making it a potential trade consideration: 1 mo TR of 1.08% and 3 mo. TR of 2.45%. It was a very popular fund in 2019 and in early 2020, and it may be returning to its better long term performance pattern." dt, I owned shares in this fund until the 2020 market crash when it lost 11.7% in March. It is now, as you say, "showing some strong short term momentum". But, with a "moderate" interest rate sensitivity, according to M*, and an average effective duration of 5.8, it is not surprising that while yields climbed sharply in the first quarter of 2021, PUCZX lost 2.6%. However, now that the reverse is happening, and yields have been dragged down in recent months, perhaps one shouldn't be surprised at the fund's "strong short term momentum". I don't know if this fund "may be returning to its better long term performance pattern." Unless the managers are flexible and make appropriate changes to the fund, interest rates will have to continue to go lower in the future to support PUCZX's continued positive momentum. At this time, I feel more comfortable holding bond funds with "limited" interest rate sensitivity. Fred Hey Fred, I have never owned PUCZX. Before the 2020 crash, PUCZX. JMUTX, and JMSIX were frequently discussed as outstanding performing funds, but not often mentioned since the crash. Its short term performance jump, might be a fund to consider as a momentum play, but it does have a high percentage in derivatives, and does appear to have earned its higher risk rating. I am not "recommending" any of these funds, but just thought they are showing some stronger recent performance that might be of interest to some posters. Another multisector fund, similar in performance to PUCZX, with shorter duration and lower interest rate risk, is RNSIX. It has Gundlach involved in the portfolio management, so there are some things about it that you might find interesting. |
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Post by fred495 on Jul 25, 2021 20:47:59 GMT -5
dt, thanks, I'll take a look at RNSIX. Interesting to see that one of the listed managers of the fund "co-manages the firm's closed-end fund trading strategies". Need to get more information on its CEF holdings, if any. Those things make me a bit nervous.
Besides PUCZX, I also used to own shares in JMUTX, but I lost interest in them after the heavy losses the funds experienced in March of last year. Luckily, I sold them before too much damage was done.
I am not much of a momentum player. Generally, I now try to invest in funds that offer a fairly smooth ride, more or less, with standard deviations of less than around 7 or 8%.
Fred
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Post by DT on Jul 26, 2021 8:46:49 GMT -5
Fred: "I am not much of a momentum player. Generally, I now try to invest in funds that offer a fairly smooth ride, more or less, with standard deviations of less than around 7 or 8%."
Fred, I am not clear on how you define "fairly smooth ride, more or less, with standard deviation of less than around 7 or 8%". Your holding of OSTIX has a SD of 5.74, and it had peak to trough loss of 9.86% in the March 2020 crash, and over a 3 year period it had a total return of a little over $17k. If you compare it to MNCPX, MNCPX has a SD of 3.68, and it had a peak to trough loss of 6.70% in the 2020 crash, and over a 3 year period it had a total return of a little over $17k. It appears you would have gotten about the same total return over the past 3 years with both OSTIX and MNCPX, but you would have attained that TR with lower SD and lower peak to trough loss with MNCPX. Why would you choose to own OSTIX instead of MNCPX, if you are looking for performance with a "smoother ride"?
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Post by fred495 on Jul 26, 2021 13:34:09 GMT -5
dt said: "It appears you would have gotten about the same total return over the past 3 years with both OSTIX and MNCPX, but you would have attained that TR with lower SD and lower peak to trough loss with MNCPX. Why would you choose to own OSTIX instead of MNCPX, if you are looking for performance with a "smoother ride"?"
Good question, dt. The simple answer is that I didn't have MNCPX on my radar screen. Thanks for bringing the fund to my attention. Much appreciated.
As I said, I was drawn to OSTIX because of its consistent total return performance of between 5 and 6% over the past 3, 5, 10 and 15 years and its low duration. Additionally, I had no dedicated corporate HY bond exposure in my portfolio.
Fred
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Post by DT on Jul 26, 2021 14:56:53 GMT -5
Fred: "I am not much of a momentum player. Generally, I now try to invest in funds that offer a fairly smooth ride, more or less, with standard deviations of less than around 7 or 8%." Fred, I am not clear on how you define "fairly smooth ride, more or less, with standard deviation of less than around 7 or 8%". Your holding of OSTIX has a SD of 5.74, and it had peak to trough loss of 9.86% in the March 2020 crash, and over a 3 year period it had a total return of a little over $17k. If you compare it to MNCPX, MNCPX has a SD of 3.68, and it had a peak to trough loss of 6.70% in the 2020 crash, and over a 3 year period it had a total return of a little over $17k. It appears you would have gotten about the same total return over the past 3 years with both OSTIX and MNCPX, but you would have attained that TR with lower SD and lower peak to trough loss with MNCPX. Why would you choose to own OSTIX instead of MNCPX, if you are looking for performance with a "smoother ride"? Just curious--OSTIX is a good fund for all the reasons you have noted. |
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Post by fred495 on Jul 28, 2021 16:53:12 GMT -5
Just to round out the picture, in addition to the reasons I already mentioned, OSTIX is also a good fit for my portfolio since I wanted a fund to complement my other bond funds. RCTIX, for example, is heavily concentrated in securitized issues. OSTIX, on the other hand, is primarily focused on the corporate sector, and NVHAX on munis.
Hopefully, the benefits of diversification will play a positive role in this rather uncertain interest rate environment.
Thanks, as always, appreciate your comments and suggestions.
Fred
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Post by DT on Jul 29, 2021 6:40:12 GMT -5
Just to round out the picture, in addition to the reasons I already mentioned, OSTIX is also a good fit for my portfolio since I wanted a fund to complement my other bond funds. RCTIX, for example, is heavily concentrated in securitized issues. OSTIX, on the other hand, is primarily focused on the corporate sector, and NVHAX on munis. Hopefully, the benefits of diversification will play a positive role in this rather uncertain interest rate environment. Thanks, as always, appreciate your comments and suggestions. Fred Fred, I think what gets lost in your postings about "bond holdings", is that there is much more to your bond portfolio than your "diversification" between 3 junk bond oefs, which is focused on different categories of junk bonds--RCTIX, NVHAX, and OSTIX all carry overall portfolio credit ratings in the junk category. The other major category of bond holdings come from VWINX--VWINX represents 50% of your portfolio, and 2/3 of that holding are Investment Grade Corporate/Government bonds, with longer duration (almost 8 years). It appears that your bond diversification, should reflect long duration, investment grade bonds, which appear to be about as much of your total bond portfolio, as your 3 junk bond oefs. I am not criticizing your investing choices, but your bond holdings from VWINX are a real component of your overall bond holdings in your portfolio. |
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Post by fred495 on Jul 29, 2021 11:07:02 GMT -5
dt, when I previously posted that "I currently have only three bond funds in my portfolio (OSTIX, RCTIX and NVHAX); they make up 35% of my portfolio. I have 50% in a balanced fund (VWINX) and three alternative funds (ARBIX, CTFAX and JHQAX), and the remaining 15% is in cash.", I was trying to say that 50% of my portfolio consists of VWINX, ARBIX, CTFAX and JHQAX, not that 50% was in VWINX alone.
Sorry for the misunderstanding.
Fred
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Post by DT on Jul 29, 2021 12:02:04 GMT -5
dt, when I previously posted that "I currently have only three bond funds in my portfolio (OSTIX, RCTIX and NVHAX); they make up 35% of my portfolio. I have 50% in a balanced fund (VWINX) and three alternative funds (ARBIX, CTFAX and JHQAX), and the remaining 15% is in cash.", I was trying to say that 50% of my portfolio consists of VWINX, ARBIX, CTFAX and JHQAX, not that 50% was in VWINX alone. Sorry for the misunderstanding. Fred Fred, okay thanks for the clarification. I am still trying to get a more accurate understanding of your bond holdings. That appears to be your 3 junk bond oefs (35% of your portfolio), plus 2/3 of your VWINX position (longer duration, investment grade bonds). I can't calculate that, on my own, without knowing what percentage of your portfolio is in VWINX. Based on some of your previous comments about criteria you used to select your junk bond oefs, shorter duration to minimize interest rate risk, is important to you. However, that seems to be in conflict with the more extensive interest rate risk of the bonds held by VWINX. I am just trying to get a more accurate picture of your bond holdings in your portfolio, and trying to understand your criteria for selection of bond holdings in your portfolio. I am not familiar with ARBIX, CTFAX, and JHQAX, so "maybe" there are some bond holdings in those funds as well? At any rate, that was the basis for my follow up questions/comments. |
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Post by fred495 on Jul 29, 2021 16:37:54 GMT -5
dt, appreciate your interest.
You are absolutely right that the bond holdings in VWINX contradict my current stated criteria of selecting fairly well performing bond funds with low duration and limited interest rate sensitivity. I added VWINX to my portfolio as a low risk opportunity to take advantage of the recent shift in the equity market from growth to value. It's only 10% of my portfolio, but its traditional 40/60 bond/equity combination has worked out well. So far, so good.
The three "alternative" funds impressed me for their excellent risk/reward profile and their superior down-side protection during last year's market crash. I didn't actually check their bond holdings. But, I am holding them currently in lieu of having any other significant equity exposure. In general, I find equity valuations, especially with the delta variant coming down the pike, quite lofty at this time.
Sorry, if I couldn't be more helpful, but glad you asked your follow up questions. Was a very good exercise for me, too. It's easy to loose the overall perspective of what one is trying to accomplish with one's investments.
Thanks, and good luck,
Fred
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