February 2022 IssueLong scroll reading

21 In 21 Plus Annuity Modeling and New Taper Periods

By Charles Boccadoro

We posted month ending January 2022 performance to MFO Premium site early Thursday morning, 3 February. Pretty tough month! Nearly all funds should be included in this “incremental” drop from Refinitiv, but any omissions will be incorporated in the full monthly drop on Saturday.

We hosted our year-end review webinar on 4 January. Thank you again to all who participated! I benefit from these sessions just as much as I hope you do. It was the third consecutive year in which most domestic equity funds did well, enjoying last of the Fed’s “Infinity” round of Quantitative Easing. Energy funds finally recovered. Most bond and emerging market funds struggled in anticipation of tapering and rising rates. Here are links to the chart deck and video recording.

Of the 6,700 mutual funds available in the US, only 21 incurred no drawdown in 2021 (based on month ending total return, excluding money market funds), while delivering returns exceeding their dividend yield, nominally. And, of those, only 17 offer yields greater than a 1-year CD, which is about 0.60%. Three of those (RSIIX, CBLDX, and DGFFX) are advised or sub-advised by David Sherman of Cohanzick Management, whom David Snowball has championed for years. Here are the 21 mutual funds, sorted first by category and then return:

Other notable funds on list profiled previously on MFO: IOFIX, managed by Tom Miner of Garrison Point Capital; ZSRIX (sustainable sister of ZEOIX), by Venk Reddy of Zeo Capital; and ICMUX, by Hunter Hayes of Intrepid Capital.

The table below looks at the funds above that deliver yield, but now since the start of the CV-19 market cycle in January 2020, in order to see how they behaved during the most recent bear. It is sorted by MFO Risk and then MFO Rating and then return. The funds that drew down the least, like TRBFX, ICMUX, and CBLDX, appear to be promising candidates for conservative investors looking for yield.

Most of the site’s new features this month were requested by subscribers:

  • Fund Family Ratings. Carlo Forcione of Putnam Investments suggested we include 1, 3, and 5-year ratings, in addition to lifetime, to better assess the near-term performance of more established families. It’s a good add, which helps adjust expectations. See Families.

  • Fixed Rate Returns. Michael Sullivan of Chesney Sullivan Wealth Advisors suggested we add reference indices to help model an annuity portion of a portfolio. So now in the Portfolios tool, you can input RATE0300 to model say a 10-year MYGA (Multi-Year Guaranteed Annuity), which delivers a fixed 3% return and dividend, along with other funds. See all rates available along with dozens of other reference indices and their convenience symbols, like CASH, SP500, USBOND, on the Definitions page under Reference Indices.

  • Taper Periods. Yet another timely request from Devesh Shah, who publishes the YouTube Channel Understanding Personal Finance. Last July, the Fed announced its intention to begin rolling-back bond purchases. But unlike a similar announcement in 2013, this time there was “no tantrum,” not immediately anyway. To help better assess funds during such times, especially bond funds, we have several evaluation periods, like Taper 1, Normalization 1, Taper 2, Rising Rates. See all available on the Definitions page under Display Period.

One other addition to MultiSearch, the site’s main tool, is Calendar Monthly Return Ratings, which complements the Trend and Momentum metrics.

As always, if you see anything amiss or have suggestions for improvement, let us know and we will respond soonest.

Please enjoy the latest data and features.

This entry was posted in Charles on by .

About Charles Boccadoro

Charles Boccadoro, BS (MIT), Post Graduate Diploma (von Karman Institute, BELGIUM). Associate editor, data wizard. Described by Popular Science as “enthusiastic, voluble and nattily-dressed,” Charles describes himself as “a recently retired aerospace engineer.” He doesn’t brag about a 30 year career that included managing Northrop Grumman’s Quiet Supersonic Platform and Future Strike Systems projects, working with NASA and receiving a host of industry accolades. Charles is renowned for thoughtful, data-rich analyses and is the driving force behind the Observer’s fund ratings and fund screeners.