The Barclay's article linked by @msf helped me a lot in grasping how the CAPE sector rotation works. It's illuminating to see what sectors never made it in at all and that energy was in for only one month. If CAPE had a "value" tilt, sectors such as utilities, real estate, financials, and materials might be selected, but they were not. Sherman's comment as cited above by @davidmoran, makes it clear why investors should not expect the fund to act like a bulwark against market downturns.
I am happy with my holdings in DSENX because the strategy and implementation are way beyond what I could replicate on my own. Over my investing years I've read explanations by several smart-seeming managers (anyone remember Ryan Caldwell?) whose funds never produced anything worthwhile. The CAPE and DoubleLine people strike me as being really smart and they are producing returns for me and others on this board.
I have also owned the CAPE ETN at times because I like to trade certain CEFs or ETFs when I see a possible market inefficiency. As I have said before, CAPE is a tough fund to trade because the spreads are so wide. Only occasionally is there an advantage to exploit.

... managers ... look at 11 US stock sectors and select 5 undervalued sectors, then take 4 sectors out of 5 with the best momentum.

A couple of clarifications:
The five candidate sectors are the most undervalued not relative to the market, but to themselves. This allows for the inclusion of traditionally overvalued sectors that may still be overvalued relative to the market, albeit somewhat less so than historically. People seem to think that the methodology is designed to select sectors that are undervalued relative to the market. That is not the case.
Edit: @LLJB - I composed this before seeing your better post on relative valuations. One sometimes sees 20 year lookback periods (as you described for the CAPE values used) and sometimes 10 year periods. Each of the CAPE values itself is computed with a 10 year lookback, so the raw data that feeds into this index could extend as far back as 30 years!
Here's a paper that shows for the 11 sectors, in which months during 2018 they were included in the Shiller Barclays CAPE® US Sector RC 10% USD TR Index. That index picks the same four sectors as the Shiller Barclays CAPE® US Core Sector Index. The only difference is that the former adjusts its market exposure up or down to temper volatility.
https://indices.barclays/IM/33/en/efsdocument.app?documentId=374&filename=Shiller10PerformancAnalysis.pdf
Two sectors were included in all twelve months: technology and healthcare. IMHO, a fund that maintains a steady 50% exposure to technology and healthcare (combined) is no value fund. The sectors may have had low valuations relative to their historical norms, but they were not low relative to the market. See, e.g. US News, The Most Overvalued and Undervalued Stock Market Sectors of 2019, Jan 11, 2019.
Based on forward looking P/Es (I believe Shiller uses retrospective figures), technology and healthcare were smack in the middle of the pack. Compared to their historical P/Es, they're undervalued (as are several sectors according to the article).
Regarding momentum, that's based on a one year look back, as opposed to the ten year look back for Relative CAPE® Indicator (historical valuation).

>> That's as clear as mud. It says that there's a fee to "buy into" DSEEX, but doesn't say whether converting shares counts as "buying into" the fund.
I find it clear, but that may be because I have executed it so often; also, I've known for years that our reading comprehension differs.

If it was even possible that your experience influenced your read, regardless of whether it actually did, then the text was not without objective ambiguity. Either that, or you sometimes read things differently than the plain text on the page. As might I.

Sometimes the custodian will issue a trade confirmation on the swap, which makes it look like we sold one share class and bought into another. Though technically that is true, it is essentially a non-taxable swap into a different share class of the same mutual fund, albeit one with a lower expense ratio.

Emphasis added . ParsecFinancial, What is a Mutual Fund Share Class Exchange

@Derf - maybe as a member of SA I don't see what ad it is you're referring to. If there are ads in the link I apologize but in fairness I come across them in most of the articles linked from this discussion board. If this is not what you are referring to then I don't follow/understand your complaint.
@David, @FD1000 - I think at the start of Van Knapp's study he considered other like-minded dividend growth ETF's but SCHD stuck out. There is a link to the original article contained within the article I linked which will explain the process he went through and the reason for his choice 4 years ago.
Granted, things change.

Where does DSENX FUND fall in your buckets? Large Value, Allocation, or ?

Seeing as DSENX invests in those sectors that are the cheapest, I would it expect it to be less volatile than the market and that it would resist downdrafts better. Why don't the numbers play out this way? The downside capture ratios are all slightly greater than 100%.

As for buckets its not a simple answer and it can change every month. According to M*'s definition of the "buckets" the equity exposure is currently 39% large cap growth, 22% large cap blend and 30% large cap value plus 8% mid cap spread across the buckets.
The fund's definition of "value" is very different than M*'s. The fund buys 4 of the 5 "cheapest" sectors based on Shiller's CAPE ratio RELATIVE TO THAT SECTOR's 20 year history. That means Technology can have the highest current sector P/E ratio AND the highest CAPE ratio out there but if its CAPE ratio is relatively lower than other sectors compared to what its been over the last 20 years then its in the fund. This is why you can't "expect" the fund to be less volatile. It is not just a "value" fund according to M*'s definitions.
As @Carefree alluded to, the effective exposure of the fund is 50% equity and 50% bonds so suggesting its an Allocation fund with 50-70% equity makes some sense too.
When I want to "X-ray" the buckets my portfolio falls into I use the SPDR Select Sector etfs to represent the value of my holding because M* isn't able to do that. I forget about the bonds because my reason for holding DSEEX isn't for the bonds, its just an added bonus.
The derivatives, the swaps they use to get exposure to the sectors they want, have two main benefits as far as I can figure out.
The fund currently has $6.7 billion in AUM. That means if one of the sectors in the portfolio changes they would need to sell roughly $1.7 billion of one sector and invest it in the new sector at month-end. The SPDR Select Technology etf trades a little over $1 billion daily. They wouldn't be able to do that without impacting the market or spreading out their trades over a week or more, I don't think. AND, most of the calculations behind the choices are public information, so their moves could and likely would be arbitraged.
The swaps allow them to get all the exposure they want at the month-end price in a private transaction, quite frequently with Barclay's the last I checked. You'd have to assume Barclay's doesn't want to be short those sectors but they have the flexibility to hedge their "bet" with futures, options or actual share purchases over a more flexible time frame and that makes arbitraging the transactions more complicated.
The second benefit is that there's no cash outflow to "bet" using a swap. Six months from now, or whenever the swap expires, one party or the other will have to "pay" the other. In the meantime, though, they can use all that cash to buy bonds, which in my view helps to pay the "cost" of the swaps, reduces the expense ratio and can also increase the return of the fund if things go well.

@CareFree,
From a year and a half ago:
https://www.marketwatch.com/story/doubleline-fund-doubles-the-returns-of-rivals-by-uncovering-a-curious-strategy-2017-11-30
The fund is not specifically defensive in nature, [Jeffrey] Sherman explained, because it is not designed to outperform during a market pullback. Instead, it seeks to outperform the S&P 500 over the long term through the sector rotation of the Shiller Barclays CAPE US Sector Index, augmented by the returns on the fixed-income portfolio. ...
... the fund’s management style mitigates the danger of chasing performance, because the index it invests in can change its sector focus each month.
It’s also interesting to note that during 2015, when large-value strategies fared poorly against the S&P 500, the fund outperformed both. And when the large-value category beat the S&P 500 in 2016, the fund again outperformed both.
@msf,
>> That's as clear as mud. It says that there's a fee to "buy into" DSEEX, but doesn't say whether converting shares counts as "buying into" the fund.
I find it clear, but that may be because I have executed it so often; also, I've known for years that our reading comprehension differs.

From David Van Knapp at SeekingAlpha:
Summary
° I bought the dividend ETF SCHD in 2015.
° My purpose was to test it out as a possible dividend-growth ETF and see how it compares to my own results with individual stocks.
° This report shows how SCHD has performed during my four years of ownership in dividends, dividend growth, and total return.
° I hope that the information here may help other investors who are considering dividend ETFs as components of their dividend-growth portfolios.
"This is a 4-year review of my ownership of Schwab's US Dividend Equity ETF (SCHD). I will compare its performance since I bought it in 2015 to the performance of my public Dividend Growth Portfolio (DGP) over the same timeframe."
Story Article

Har. Someone goes to M*
http://portfolios.morningstar.com/fund/summary?t=DSENX&region=usa&culture=en_US
and is supposed to parse out at a high level (or any level) what sort of beast this is.
45% bonds, it says. Nothing listed under market cap or holdings style. Benchmark is Russell 1000. Check those wack style boxes for 2016 (LB) and 2018 (SV!), missing other years. Equity % is always under half. (So maybe it's a balanced fund?) Equity % jumped more than 50% 2017-'17.
And you would just tell them, Well, all M* is doing is transcribing, nothing to criticize here as misleading. Or confusing. Or unclear.
All righty, then.

FYI: Dear retail investors holding lame 0.75% bank certificates of deposits and U.S. Treasury bonds yielding a tad over 2% for 10 years. If you want your money to yield something outside of the stock market, then it’s time to leave the United States.
Not pack-your-bags, sell-your-home leave the United States. But time to diversify out of U.S. bonds and CDs and put that retirement money somewhere far, far away.
It can’t go to Germany. That’s a negative yield debt. It can’t go to Japan. That’s money under the mattress. So it has to go to the emerging markets. Like China. Yes, China.
Regards,
Ted
https://www.forbes.com/sites/kenrapoza/2019/06/21/for-fixed-income-investors-time-to-leave-america/#290485bc51f6
M* Snapshot GARBX:
https://www.morningstar.com/funds/xnas/garbx/quote.html

It is interesting to compare DGRO, DGRW, OUSA, QUAL, NOBL, SCHD, and VIG over the last 3, 2, and 1 years and see which ones move ahead of the others. (All outperforming CAPE for the 1- and 2y periods but not longer.)

@Mark,
I just emailed them to remind me what it is I have done for several years now, the same process each time, no changes. I think it was just that once DSENX got above $100k, a phone call permitted quick reclassification to DSEEX, no TF, no nothin'. But my memory for these things is sievelike, hence the email. Will report.

These back doors can change day to day, and also seem dependent on the competency of the rep one is talking to. I've done two tax-free, commission-free "upgrades" of funds in my taxable account. But I've encountered difficulties as well.
Generally speaking, these transactions require the approval of the fund company. (That's true at least for the tax-free part.) One of the funds I've done this with was a Baird fund. Months (years?) later I called to check that Fidelity could do the same thing with another, similar Baird fund, and the rep claimed that this is never done, I couldn't have done it, that institutional shares are only available to institutions (Baird has a $25K min on its institutional class shares), and so on. That call was a total waste of time.
For tax-free exchanges at least, Fidelity will check with the fund company while I'm on the phone to see if they will accommodate me. If the rep says he's checking with the fund company, that indicates he knows what he is doing.
Sometimes the fund company will simply refuse. Years after I bought shares of a particular fund, the company started waiving loads on its funds' A shares. Since the ER on my shares was about 3 basis points higher than on the A shares, I asked Fidelity if they could do a tax-free exchange. Fidelity checked with the fund company and was told simply, no. Not a big deal, the ER difference was inconsequential. Still, it showed that there's a certain capriciousness about the whole system.
Somewhat related - I own another fund, institutional class. I tried to make an automated addition (for $5 TF rather than the $50 if I placed the order directly). The system rejected the order - apparently the fund had been removed from Fidelity's list of funds eligible for automated investments. Fidelity told me that they were working with the fund company to get approval for automated investments.
The bottom line is that the rules imposed by DoubleLine on this fund may have changed, or you may have gotten a rep who didn't know what he was talking about. You could try calling again. And you could also get the same answer.

FYI: High dividend strategies may seem like the way for income investors to go with the Federal Reserve looking like it could cut interest rates later this year, but dividend growth exchange traded funds, including the iShares Core Dividend Growth ETF DGRO, +0.21% still merit consideration.
DGRO tracks the Morningstar US Dividend Growth Index and holds 480 stocks, giving it one of the larger rosters among dividend growth ETFs. That index requires members firms to have minimum dividend increase streaks of at least five years, one of the more liberal requirements in the universe of dividend growth ETFs.
Importantly, DGRO's underlying index also excludes companies with excessively high yields and only permits the inclusion of companies with payout ratios of less than 75%.
Regards,
Ted
https://www.marketwatch.com/story/a-darling-among-dividend-growth-etfs-2019-06-21-6463255/print
M* Snapshot DGRO:
https://www.morningstar.com/etfs/arcx/dgro/quote.html

IMHO The central banks, notably ECB and the U.S. Federal Reserve, have changed the playing field. We’ve gone in a few short months from a policy of interest rate “normalization” (Fed euphemism for raising rates) to “sustaining the expansion” (Fed speak for flooding the markets with easy money). Sudden shifts like this are uncommon. Many market timers were caught off guard. In my 50 years investing I can’t think of more than a half dozen or so such sudden and consequential changes in the playing field. The tight money policies of Paul Volker were one. The financial collapse of late 2007 was another.
The eventual success of / consequences of the recent shift in policy are uncertain. Short term it seems to have inflated most risk assets. The downside if the policy “succeeds” may well be a weaker dollar and higher prices for goods and services in coming years. The turmoil Wednesday’s policy statement precipitated points, I think, to the importance of staying diversified and sticking to a plan rather than trying to outguess the markets.

Hi @hank.,
The "Sell in May" axiom has many spins to it. Below is mine.
Generally, Old_Skeet does a portfolio review and a calendar rebalance in May and October and at other times if felt warranted. My asset allocation threshold is 20% cash, 40% income and 40% equity. I allow for a 2% + (or -) movement from the threshold for my income and equity areas while I generally let my cash area float. In addition, I can, if felt warranted, tactually let equity bubble up to +5% from it's threshold. With this, the cash area can float from a low of 13% up to a high of 24% depending on where my income and equity allocations bubble.
As we entered May I was equity heavy; and, I reduced my allocation to equities raising my allocation to cash. As equities pulled back in May I did a little buying but staying well within my asset allocation ranges, of course. So, thus far, this has worked well for me playing the swing so-to-speak. My market barometer is a tool that I developed and I use to assist me with market calls along with using it to help me throttle my equity allocation. As of market close June 20th, it scored the S&P 500 Index as extremely overbought. Perhaps, now might be a time, for me, to take a little off the table and book some profit since the S&P 500 Index reached a new all time hight.
The Sell in May and Come Back After St. Legers Day axiom is one that my family has followed for a good number of years. For us this has worked well through the years; but, like most everything else it does not work every year.
It will be interesting to see how stock valuations bubble as we approach fall. For me, the Sell in May theme simply reflects calendar times to review and, at times, to rebalance my portfolio, if warranted. After all, most of the gains in the stock market have historically taken place during the fall and winter months. It is during these times that Old_Skeet chooses to be equity heavy and then light to normal during the other periods.
So, with this, I am, in general, a subscriber to the Axiom.

Glad I never subscribed to the “Sell in May ... Go Away“ method of investing.
Looks like Ted linked a thread on that topic a month ago. Appears there were no responses from the board. https://www.mutualfundobserver.com/discuss/discussion/49979/what-to-throw-away-in-may
The article is from Forbes and is titled : “What to Throw Away in May.”
A few snippets from the linked column follow:
- if the first half of May’s decline “gets legs” and is more a beginning than an end, don’t count on finding too many stock market areas that buck the downtrend. Utilities, REITs, and Consumer Staples stocks are typical outperformers when the market’s first knee-jerk reaction occurs. But as declines deepen, these tend to be treated not as conservative ways to still own stocks, but as part of the club…a club that is out of favor.
- Gold and gold stocks, like Utilities and REITs, probably feel good for a little while amid the equity market carnage. But my chart work shows me that the upside is likely limited.
- “Credit” Bonds – to paraphrase a famous movie line…I see dead asset classes. I have written to you for some time about my deep concerns for investors who have been “chasing yield” the past several years, trying to make up for paltry income returns from CDs, T-bills and Money Market Funds. This happens in every cycle, and it is happening again. High Yield Bonds, Convertibles, Bank Loan Funds, Closed-End Bond Funds (which are typically full of leverage) are all flirting with trouble right now.
- U. S. Treasury Securities / This is a tool for traders and investment managers, but I fear that too many investors and financial advisors have shoved long-term bonds into portfolios to boost the yield, but are not considering how much risk they are taking if they view it as a “buy and hold” position.

Hi @ hank
@Bobpa wouldn't have to move to Vanguard for the VWINX purchase.
I had an indirect account with Vanguard many years ago, but only for the purpose of having a 401k placed there by the company, and there was no brokerage feature.
But, all of our primary accounts have always been with Fidelity. The 401k monies have since moved to Fidelity, too.
Many years ago (30)?, when one opened an account at Fidelity for mutual funds, if you wanted to also purchase other than Fidelity mutual funds and stocks, a separate brokerage account could be opened; and the fund and brokerage account were internally connected.
Today a new Fidelity account, although there may be special conditions for some special account types; comes with the brokerage feature regardless. The brokerage feature applies to taxable, traditional and Roth IRA accounts; and perhaps other.There is no requirement to use the brokerage; but it is one's money path to wherever you want the money to travel.
For this thread purpose, VWINX simply becomes another purchase within one's Fidelity account. There is no requirement to have any Fidelity product within the account, with the exception of a core money market fund for parking money from a sell, and awaiting to be placed towards the next purchase; simply an internal transfer station.
The process is very smooth internally.
@Old_Joe noted a similar process for Schwab.
'Course, we don't have a clue as to @Bobpa and where his account resides.
I fully agree, that it would not be worth the effort to attempt to find a match for VWINX.
Good night,
Catch

Tend to agree with the suggestion above to go with the “real deal.” I suspect VWINX isn’t an easy one to duplicate. On the other hand, if, like me, you’re accustomed to working directly with just one or a small handful of houses, I can understand why you might not want to move to VG.

Also in the last few years, since opening their brokerage, Vanguard has become a pain to deal with. They are understaffed but yet so big that the right hand doesn't know what the left hand is doing. This is not a criticism of the actual fund managers. Vanguard now insists on going through the brokerage even for opening positions in their own funds. Some of younger employees working at the brokerage are less than competent and not well-informed about how things actually work at their own company. I still like certain Vanguard funds, including VWINX, but I do not enjoy communicating with customer "service" at Vanguard.

Couple weeks ago I posted a link at VG that let’s you enter a symbol from another fund complex and thereby learn what VG considers their closest match. Works opposite of what you’re trying to do. But may be of some help in verifying that the fund(s) you’re considering is considered similar to VWINX in VG’s eyes.
https://www.mutualfundobserver.com/discuss/discussion/50424/interesting-fund-cross-reference-tool-from-vanguard
Tend to agree with the suggestion above to go with the “real deal.” I suspect VWINX isn’t an easy one to duplicate. On the other hand, if, like me, you’re accustomed to working directly with just one or a small handful of houses, I can understand why you might not want to move to VG.
At a glance VWINX appears to be 40/60 fund (heavier on the fixed-income side). One I like at Price that’s
a well run 40/60 fund is TRRIX. But it lags VWINX performance wise (by about 2 percentage points over 10 years). Hard to beat VG’s low ER. That’s often the difference between a very good fund and a great one,

No, not international at all, but LV; buys and sells monthly within the SP500 according to rules involving valuations.

Oh sorry, for some reason I saw the letters and thought of the European version. I must be getting old. Hell, I've owned DSENX for years now.
In that case, plain old LV is how I classify it.

haha, figured that might be the case
sold out of DLEUX today, finally above my breakeven

Not in my Fidelity Roth IRA, so far as I can see anyway, and a $50 TF as well.

How many years since you opened your position in DSENX?
At a savings of 0.25%/year, in four years one would make up the TF on a $5K initial investment. Less time on a larger investment. Each additional investment could be made at a cost of $5/buy. So if one were adding $2000 at a time, one would break even in a year.
Clearly not useful for traders. But for people investing for the long term (or at least keeping a long term toe hold in a fund), cheaper institutional shares (for this fund or any other) can certainly be worth the entrance fee.