SAGAX FUND THOUGHTS? Here's what I can share from owning ZVNBX, one of the two Zevenbergen funds -- the other N class being ZVGNX.
The fund managers are very focused and articulate about their reasons for owning a concentrated portfolio of two large cap growth funds, the outcome of running separate managed accounts for 30 and 26 years in these products.
In general, the main difference between ZVNBX and ZVGNX (Genea) is that the latter is focused on founder-led companies (Musk, Bezos), does not own any health care companies, and is invested in more companies that are, let's say, very early in the curve.
Some nuts and bolts:
From a revenue side, their initial hurdle rate is owning companies that have a minimum growth rate of 15% but a revenue growth rate of between 25-30%, and if they can't grow at that rate, they consider selling. They want to own companies whose business model can sustain that growth rate for 1-3-5-10 years, those companies they consider durable.
(An example of a company they own is NOW (Service NOW), a tech company. It recently said that they expect $7.4T in digital transformation in the next three years.)
These funds can be volatile, and so investor returns lag investment returns, which they often do in many funds, as most of us know. Overall, however, they have had positive inflows since inception.
The average portfolio turnover since inception has been 30%.
Platform availability continues to expand. Having two LCG funds has not been as easy to market, and the firm has a small marketing budget. In mid-April total AUM was about $65M despite being in existence for less than 5 years. It's $95M now.
Schwab offers both N classes NTF for a purchase of $100.
While M* classifies the funds as LCG, they consider the funds all-cap. They can drive attribution in the small and mid cap space as well.
These offerings are worth investor awareness, additional thoughts, and what the initial poster is asking.
May Jobs Report Stronger than Expected / PUNDITS! Poor Mohammad El-Erian - just one of a parade of gloomy morose prognosticators Bloomberg has frequently featured on air over the past two or three months. Not to pick on just El-Erian, Larry Summers is another gloomy predictor they’ve rolled out since the market encountered a downdraft in March. Here’s
El-Erian in April .
Hilarious watching El-Erian try to do some sort of mid-course correction this morning after the hot (warmer?) data came out. Sounds like he’s pushing short / intermediate investment grade corporates at this point. Points to the dangers of trying to base long term investment decisions on these types of pronouncements. Truth is: Nobody knows where the global economy will be in a year - let alone 5 or 10
years. If you can’t have a 5-10 year time horizon, you shouldn’t be in equities & most risk assets at all.
Purely local and anecdotal - but in northern Mi it’s almost impossible getting construction / remodeling done this summer. Builders are backed up for months. I suspect a lot of money that would have gone to the airlines and hospitality businesses this summer is being pumped into home improvement projects instead. Tourism locally is down, but improving. Big box stores are crowded. Waited half an hour in a check-out line this week.
Link to May Jobs Report Story:
https://www.bloomberg.com/news/articles/2020-06-05/u-s-jobless-rate-unexpectedly-fell-in-may-as-hiring-rebounded
David Giroux interview on buying during the selloff Giroux is one of the best managers of all time.
Dodge & Cox just the opposite.
PRWCX is why you want to own managed funds. A flexible and correct approach for years. In most cases for most investors just use stocks indexes + managed bond funds, especially if your portfolio has a higher % in bonds.
7 best CEFs https://money.usnews.com/investing/funds/slideshows/best-paying-closed-end-funds7 best CEFs
Best Closed-End Funds of 2020
Barbara Friedberg
June 3, 2020, 4:02 PM CDT
Here are the best closed-end funds for income.
/Closed-end funds have been around for more than a hundred
years. Today, they currently offer juicy yields. Shares of CEFs are traded on the open market. Like stocks, CEFs are offered at an initial public offering. They're invested in a portfolio of securities and managed by an investment firm. Unlike typical mutual funds, new money doesn't flow into these funds; the existing shares are bought and sold by investors. CEFs, similar to exchange-traded funds, invest in a variety of securities, such as stocks, bonds and alternative investments. CEFs can also sell at a premium or discount to their net asset value -- meaning you can essentially buy shares on sale. CEFs have a distribution rate, instead of a dividend rate, and this may consist of earnings, capital gains and return of principal. If you're considering a CEF, review its prospectus to understand how the yield is determined. Here are seven of the best closed-end funds for income across a variety of sectors/
Top-producing closed-end funds for investors:
-- The India Fund (IFN)
-- Voya Emerging Markets High Dividend Equity Fund (IHD)
-- Aberdeen Total Dynamic Dividend Fund (AOD)
-- BlackRock Taxable Municipal Bond Trust (BBN)
-- Hercules Capital (HTGC)
-- PIMCO High Income Fund (PHK)
-- BlackRock Core Bond Trust (BHK)
David Giroux interview on buying during the selloff Good morning
@hank. I take it your buy/sells were in equities that you own or did own ?
Stay Safe, Derf
Hi Derf, It was crazy back than. I left enough “tracks” here back in March to provide a pretty good idea (and some verification) what I was doing.
- The largest move entailed several buys into PIEQX (from cash) which I did
not own at the time. It wasn’t viewed as a “money maker”, but rather as a defensive area which I didn’t think would drop much further if held for a few
years since Europe & Japan had been stuck in a deep rut going back decades. I’m still holding about 80% of that position, having cut it back just a bit this week.
- I also alluded back than to adding to DODBX which I
did own at the time. The funds came both from DODIX and from RPGAX, a large holding I reduced (and suggested others consider).
- Smaller investments (not reported than) were made into DODGX and PRLAX after it briefly was down 50% YTD and for one-year as well. I did
not own either of those at the time. I’ll occasionally scan T. Rowe’s listings looking for badly beaten up funds to buy (short-intermediate term holds). Hopefully, they appreciate that at least one client is buying a badly floundering fund when most are fleeing. :)
- Like many here I assume - some rebalancing took place around mid-late March. Without specifying all the funds involved, along with equity-centric funds, those invested in the natural resources areas badly needed some shoring-up. All very small moves compared to the others noted above.
Bond mutual funds analysis act 2 !! 1) my favorite 3 bond categories. Multisector, NonTrad, HY Muni. Since 2019 I also use HY Munis in my IRA, it's unusual but I look at risk/reward, and this category given me good results. Schwab let you buy these funds in IRA (after you acknowledged it) but not Fidelity.
2) concentration, usually 3 funds but many times one fund over 50% like now.
3) all my funds must perform well, at least not losing. It's not necessary the best performance but a good risk/reward.
4) SD=volatility is very high on my list. If any bond fund I own loses more than 0.5% from the last top I start asking why. If it loses 1% from its last top I sell immediately in most cases. Did others in the same category follow? can I find a better fund? the HY Muni bonds are similar but Multi+NonTrad can be unique. IOFIX/EIXIX are different than more typical JMUTX/PUCZX multi.
5) charts+trends are my friends, they tell me much more what is going now than most articles/opinions/experts.
6) be flexible, look at markets in general. Are they "normal", crazy?
special situations call for a different approach.
Example1: the Fed announced they will increase rates a couple of years ago. Bank loans is usually one of the best categories.
Example2: we had a meltdown last March, what funds I want to use. I found ANBEX. I haven't used the high-rated bond fund for years.
7) I'm a trader, this means I may hold weeks/months or switch earlier and it could be a huge % of my portfolio.
IOFIX/IOFAX marketing materials/prospectus Hi
@Derf, As you may recall I averaged in and bought during both the downdraft and then the updraft up until S&P 2700 range. After that, I decided to just sit with with my average buy being at 2500 range and enjoy the ride back up.
I'm not good at picking tops or bottoms. This is why I roll with my base asset allocation of 20% cash, 40% income and 40% equity and adjust from there based upon stock market movement. I studied CTFAX for
years as to how it positioned during downdrafts and decided to build this concept into my own portfolio through using special equity buys and reducing cash.
I'm somewhat disappointed that it has now shifted from a risk off / risk on type fund to more of a tactical positioning one. Before, it's low asset allocation before adjusting to the movement of the S&P 500 Index was 10% equity, now it is 50%. I'm thinking, that the managers are believing that equities will now perform better than fixed income. We will see if this adjustment they made was a wise one. I had planned to buy more of it when it was a risk off / risk on type fund. Now that the baseline asset allocation has changed (from 10% equity to 50% equity) I going to just keep present position and see how things go. My first thought was to trim the position; but, for now I'll wait.
Thanks for making comment.
Old_Skeet
Bond mutual funds analysis act 2 !! Thanks for sharing. Just wondering why you would commit so much to ANBEX. For two of its first three years of existence it was middling at best. This year it went crazy good, but how could you know that enough in advance to capture the gain? I also suspect you traded out expecting reversion to the mean in ANBEX, is that correct?
It's called momentum. But, as you can see from my post I no longer hold it.
Bond mutual funds analysis act 2 !! Thanks for sharing. Just wondering why you would commit so much to ANBEX. For two of its first three years of existence it was middling at best. This year it went crazy good, but how could you know that enough in advance to capture the gain? I also suspect you traded out expecting reversion to the mean in ANBEX, is that correct?
New TSP Funds Coming July 1 I'll be 116 years old !! I don't think I'll need any TDF with 2065 on ot !! LOL !!
stay Safe, Derf
IOFIX/IOFAX marketing materials/prospectus Hi
@FD1000: I too in the past have been addressed in ways that were rather brash by some that are still present (and posting) on the board.
Years back, I was called out to start posting my spiffs, as I made them, since I was reporting good profits. With this, I am now happy to report that I am up better than 23% on my last block of buys and only have one position buy that is not yet to green light from the recent market swoon.
There are some on the board that have recently lost a good sum of money in their fund selections (one fund especially) and, with this, I have detected their testy expressions within their post. Rather than letting this run me off I decided to get tough skin and remain. Hopefully, you will as well.
Thanks again for your updates on fixed income funds. It is much appreciated.
My best to you.
Old_Skeet
IOFIX/IOFAX marketing materials/prospectus Every post you make FD is all about you. "I saw this. I did that. Every one else is dumb for missing it." The point is the likelihood of anyone 'investing" in this fund, not trading, would not have seen a 40% drop in 2 days on the horizon.
Yes, totally BS. And what is the smiley face for?
You are correct, I didn't know in advance how bad it could be but I expected it to be bad.
Your reaction is typical, I see anger and disbelief when I tell you my thoughts and how I operate. The smiley is to let you know it's all expected.
In this thread(
link), I documented many trades that I have done since 2-28-2020. I made several similar posts on MFO too, see (
here). Why no admit I made a great call.
I'm pretty sure you will come back and request me to post every trade I make :-)
My trading style has been established for
years which helped me in the last 3
years since retirement in 2018. I will sell any bond fund that loses more than 1%, actually, I even sell earlier if other funds in the same category behave differently or I can find a better fund according to my goals.
Here is the bottom line: while you claim it's all BS the facts show I sold all my portfolio to cash prior to the meltdown.
You sound a little cocky, but I wouldn't worry too much. There's some sour grapes goin around lately. I got some crap for commenting on a post on someone bummed on staying in cash, not buying the dip, and furthermore, anticipating a second covid wave to justify in another thread. These things happen. We've all f-ed up. No big deal.
June 1st Commentary is up. Hi David,
Regarding this about active mutual funds versus passive ETFs, I have a few quibbles:
They have not been repeatedly defamed by self-interested marketers and lazy financial journalists looking for cheap stories. “80% of mutual funds failed to beat the market last year” is utterly fatuous – beating the market isn’t the goal, one year is an irrelevant time period, risk matters as much as returns, very nearly all passive products also trail the market – but has made it hard to approach investors, young, professional or otherwise. The term “skunked” comes to mind. The repackage offers a clean slate.
While looking at a year's worth of performance versus the benchmark isn't very meaningful, it is actually over the long-term that active funds struggle the most to beat their benchmarks, and many financial articles have made that point. In fact, I think it is far more common to have an active fund beat a benchmark in the short-term, have an excellent year but struggle over the long-term as the cumulative hurdle effect of its fees gets harder and harder to overcome. Also, while there are many passive ETFs that don't match their benchmarks either, in the main categories like large cap, mid-cap and small-cap, they often do and sometimes even beat their benchmarks because of securities lending, or only lag a minuscule amount. Also, the long-term record of many funds versus their benchmarks doesn't necessarily improve when adjusted for risk. The SPIVA data on funds versus their benchmarks has risk-adjusted returns over the last fifteen
years:
https://us.spindices.com/resource-center/thought-leadership/spiva/92% of large-cap funds, 86% of mid-cap and 87% of small-cap funds have lagged their benchmarks on a risk-adjusted basis over the last 15
years. In fact, the one equity category where active managers had a fighting chance in this data were international small-caps where the benchmark won only 68% of the time over 15-
years. Fixed income funds were better, but not by as much as one would hope
Even gross of fees, active managers struggled:
The risk-adjusted performance of active funds obviously improves on a gross-of-fees basis, but even then, outperformance is scarce. Only Real Estate (over the 5- and 15-year periods), Large-Cap Value (over the 15-year period), and Mid-Cap Growth funds (over the 5-year period) saw a majority of active managers outperform their benchmarks. Overall, most active domestic equity managers in most categories underperformed their benchmarks, even on a gross-of-fees basis.
As in the U.S., the majority of international equity funds across all categories generated lower risk-adjusted returns than their benchmarks when using net-of-fees returns. On a gross-of-fees basis, only International Small-Cap funds outperformed on a risk-adjusted basis over the 10- and 15-year periods.
When using net-of-fees risk-adjusted returns, the majority of actively managed fixed income funds in most categories underperformed over all three investment horizons. The exceptions were Government Long, Investment Grade Long, and Loan Participation funds (over the 5- and 10-year periods), as well as Investment Grade Short funds (over the 5-year period).
However, unlike their equity counterparts, most fixed income funds outperformed their respective benchmarks gross of fees. This highlights the critical role of fees in fixed income fund performance. In general, more active fixed income managers underperformed over the long term (15
years) than over the intermediate term (5
years).
On a net-of-fee basis, asset-weighted return/volatility ratios for active portfolios were higher than the corresponding equal-weighted ratios, indicating that larger firms have taken on better-compensated risk than smaller ones.
One important saving grace I think is that SPIVA only considers risk as volatility and not downside capture or Sortino ratios. So that should be considered. All of that said, the threat from passive ETFs is most certainly real and should not be underestimated.
New coronavirus losing potency, top Italian doctor says -- Reuters Here is a link to an article that reviews the initial report from Italy. A couple of takeaways:
...the clinical findings in Italy likely do not reflect any change in the virus itself. Zangrillo’s clinical observations are more likely a reflection of the fact that with the peak of the outbreak long past, there is less virus in circulation, and people may be less likely to be exposed to high doses of it. In addition, only severely sick people were likely to be tested early on, compared with the situation now when even those with mild symptoms are more likely to get swabbed, experts said.
All viruses evolve over time, and many infectious-disease experts think the novel coronavirus will eventually become less lethal to human beings, joining four other coronaviruses in causing common colds. But there is no solid evidence so far that it has changed significantly in the five months since it was first recognized among patients in Wuhan, China. “The virus hasn’t lost function on the time scale of two months,” said Andrew Noymer, an epidemiologist at the University of California at Irvine. “Loss of function is something I expect over a time scale of years.”
https://msn.com/en-ca/news/world/experts-dispute-reports-that-coronavirus-is-becoming-less-lethal/ar-BB14TMhE
Hi Charles, June commentary clarification please. Hi
@CharlesYou noted in your commentary: Under Chairman Janet Yellen and continued by Jerome Powell, the Fed tried to “normalize” rates by gradually increasing the so-called Discount Rate from near zero to 2.4% over a three-year period
from January 2016 through December 2018. The 10-year rose above 3%. It did not last long.
The average US Treasury fund drew down about 11% during this period with longer duration being hardest hit, as one would expect. Vanguard Extended Duration Treasury Index (VEDTX) was off 20.4% during this period. BlackRock iShares 20+ Year Treasury Bond ETF (TLT) off 15.2%. Its 7-10 year cousin (IEF) off 7.1%.
1. I used the period you noted (Jan. 2016 - Dec. 31, 2018) for IEF, TLT and threw in ZROZ (a bit more volatile than TLT, but represents 30 year, AAA zero coupon bonds). For whatever reason, VEDTX wouldn't chart.
2. Perhaps I've had either not enough or too much coffee; OR I don't understand your use of
"drew down" vs total return. Secondly, is that I am suffering from cranial/rectal inversion; and thus, not aware of the status.
--- VEDTX had the following total returns for the
years being discussed (per M*): VEDTX ,
performance link at Vanguard.
2016 = +1.53%
2017 = + 13.52%
2018 = -3.49%
This
CHART is for IEF, TLT and ZROZ. Total return is at the right edge of the chart for the 3 year period of Jan. 2016 - Dec. 31, 2018.
Please alert me to any boo-boo's with statements or charts.
Thank you.
Catch
IOFIX/IOFAX marketing materials/prospectus Every post you make FD is all about you. "I saw this. I did that. Every one else is dumb for missing it." The point is the likelihood of anyone 'investing" in this fund, not trading, would not have seen a 40% drop in 2 days on the horizon.
Yes, totally BS. And what is the smiley face for?
You are correct, I didn't know in advance how bad it could be but I expected it to be bad.
Your reaction is typical, I see anger and disbelief when I tell you my thoughts and how I operate. The smiley is to let you know it's all expected.
In this thread(
link), I documented many trades that I have done since 2-28-2020. I made several similar posts on MFO too, see (
here). Why no admit I made a great call.
I'm pretty sure you will come back and request me to post every trade I make :-)
My trading style has been established for
years which helped me in the last 3
years since retirement in 2018. I will sell any bond fund that loses more than 1%, actually, I even sell earlier if other funds in the same category behave differently or I can find a better fund according to my goals.
Here is the bottom line: while you claim it's all BS the facts show I sold all my portfolio to cash prior to the meltdown.
