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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • One stunning chart shows how severe this selloff has been: Morning Brief

    To stop spreading the virus China they lock down the entire city and it slows the spread somewhat. Cannot image this can be done in a democratic society of large cities in US or Europe.
    Lockdowns may not work and may even be counterproductive.
    You can't put a ban in place before there's a reason to put a ban in place. And by then, it's too late. What's more ... people will try to sneak out of the city.
    ... That can make it much harder to track potential cases and contact, which is one of the most effective ways to contain this outbreak.
    https://www.npr.org/2020/01/25/799470705/a-travel-ban-to-contain-the-coronavirus-could-worsen-conditions-in-wuhan
    Not large cities, but Italy has been quarantining several smaller northern towns.
    A dozen towns ... were put in lockdown (and were made so-called “red zones” and quarantined) just over a week ago as the Italian government under Prime Minister Giuseppe Conte sought to halt the spread. The measures are due to be in place until at least March 8.
    There are other “yellow zones” in Italy where schools are closed, and sports events and religious and cultural spaces have been postponed or canceled.
    https://www.cnbc.com/2020/03/02/coronavirus-next-seven-days-seen-as-decisive-for-italy.html
  • mutual fund submanaged by Bain Capital
    Fund page: https://www.griffincapital.com/griffin-institutional-access-credit-fund
    Prospectus for share classes A & C (including fee structure): https://www.griffincapital.com/Documents/GIACX/Marketing Materials/Sales Kit/CreditFund-Prospectus-ClassAC.pdf
    The Adviser is entitled to receive a monthly fee at the annual rate of 1.85% of the Fund’s daily net assets. [There is a management agreement] to waive its fees and to pay or absorb the ordinary operating expenses ... to the extent that such expenses exceed 2.60% and 3.35% per annum of the Fund’s average daily net assets ... attributable to Class A and Class C shares, respectively
    Aside from the 1.85% management fee, the A shares have a 0.25% servicing fee (equivalent to a 12b-1 fee), 0.83% in other expenses. Along with a 0.32% waiver, that brings Class A total expenses to 2.61%.
    Class A CRDTX also carries a front end load. (Class C CGCCX carries a level load, shown as an extra 0.75% annual fee under 12b-1.)
    Investor application form (must go through broker/dealer or RIA, see section 9): https://www.griffincapital.com/Documents/GIACX/Marketing Materials/Sales Kit/CreditFund-AccountApplication.pdf
  • VLAAX
    @Old_Joe
    In my opinion, I don't think VLAAX is preferable, but rather fills a different need. For me I have a small new account that is just VLAAX because it is more diversified 96 stocks and 491 bonds thus is considered an "all-in-one" by many including me. AKREX is a great fund and I do hold it in another account, but it is not stand alone. It has only 18 stock holdings. AKREX has done well, but with only 18 stocks, I think it is riskier. Their standard deviation (3 year) supports my opinion AKREX 11.18 vs VLAAX 8.49. The 5 and 10 year SD are similar. In the end both seem to be near the top of their category. By the way currently VLAAX holds 7 of the 18 stocks in AKREX portfolio, albiet in lower percentage of the overall portfolio.
  • muni yield next to nothing yet investors keep buying
    "Love" to read the these articles
    "Los Angeles International Airport, rated AA, last week borrowed at below AAA yields, with bonds maturing in 2021 yielding just 0.63%. Even risky debt is paying only what top-rated securities once did. An Ohio agency sold a massive tobacco-settlement bond sale with unrated debt due in 2055 trading at an average of 3.4% yields on Friday."
    NVHAX is shorter term HY with yield over 3.5%
    WHYIX with duration=5 pays 4%
    looks to me as a decent yield + Free Fed tax :-)
  • RPHYX Sharpe Ratio
    Hi, Gundlar.
    Sharpe is a calculation of a fund's risk-adjusted returns minus the returns available from a risk-free investment, typically a T-bill.
    Neither the risk nor the returns of RPHYX have meaningfully changed. The volatility measures for RPHYX have not materially changed over the trailing 1, 3, 5, and since inception periods. The standard deviation, for example, is 0.7 / 0.6 / 0.7 / 0.7. Downside deviation is 0.4 / 0.3 / 0.3 / 0.3. Max drawdown and such, likewise.
    Annual returns since at 2.5 / 2.6 / 2.6 / 3.1.
    My best guess, then, is that the "risk-free rate of return" has increased.
    Out of curiosity, I passed along your question and my speculation to the manager, David Sherman. If I hear back, I'll share what I learn.
    David
  • Federal Reserve cuts benchmark rate by .5%
    Greg Valliere, chief U.S. policy strategy of AGF Investments said:
    "The downside is that the "saver class," which consists mostly of senior citizens, "have been hit again" because of falling yields. However, Valliere expects a "tremendous amount of refinancing."
    Great! I am going to suggest to my 85-year-old father who lives on his Social Security check and small savings, to refinance his condominium for 30 years.
  • One stunning chart shows how severe this selloff has been: Morning Brief
    Here is a chart that compares the largest one week S&P 500 declines. The recent decline was impressive based on that metric too:
    image
    Here is a link to the related Rekentahler Report article:
    https://morningstar.com/articles/969893/the-coronavirus-column
  • Federal Reserve cuts benchmark rate by .5%
    A dog chasing it's tail, IMHO. But, this will cause some short term investment thinking.
    On the other hand, investment grade bonds should prove to have a decent week; barring a "whatever" moment.
    Article, if you choose to know more
    Have a good remainder.
    Catch
  • RPHYX Sharpe Ratio
    I noticed that the Sharpe Ratio for RPHYX is much lower than it used to be 3 yr 0.75 and 5 yr 1.41, according to Morning Star. Is this cause for concern? I currently own DHEAX as a lower risk bond fund. I was thinking of adding more cash to it or starting a position in RPHYX now that it is open. Thank you for your thoughts.
  • muni yield next to nothing yet investors keep buying
    https://finance.yahoo.com/news/muni-bonds-now-yield-next-161752567.html
    muni yield next to nothing yet investors keep buying
    Americans who already held about $1.9 trillion of state and local debt poured another $113 billion into mutual funds focused on the securities since early 2019, according to Investment Company Institute and Federal Reserve figures.
  • 4 funds that provide shelter from the storm
    https://www.morningstar.com/articles/969518/4-funds-that-provide-shelter-from-the-storm
    4 funds that provide shelter from the storm
    Mentioned: Fidelity® Intermediate Bond (FTHRX), Vanguard LifeStrategy Growth Inv (VASGX), FPA Crescent (FPACX), Vanguard Wellington™ Inv (VWELX)
  • Bond mutual funds analysis act 2 !!
    There is so much talk and hype regarding IOFIX that I decided to check it out.
    Although it is very expensive for a bond fund, its returns are phenomenal and its metrics appear to be very reasonable for the most part.  Even the SD is reasonable relative to its returns.
    High sharp ratio and martin ratio, excellent UP/DOWN capture ratio, Great Owl and a risk profile of only "2", etc.
    It seems to have performed reasonably well in up and down interest rate environments, albeit in its short life.
    I am considering opening a relatively small position (5% - 7%) in my ROTH to add a little punch.  I currently own JMUIX and VCFAX.  I am very happy with both current MFs and have no plans to eliminate or reduce % invested; I have cash to invest in IOFIX.
    Thanks,
    Matt
  • Bond mutual funds analysis act 2 !!
    I agree but ZEOIX has a shorter duration ( 0.57 vs 1.4) so will handle rising rates much better
    BTW how do you easily access the older and much better fund pages at M* ? your link works but I cant get it to load any other fund's profile
  • Bond mutual funds analysis act 2 !!
    @guilhermes
    ZEOIX had a good record for several years but HY have their problem when markets collapse. Losing -0.8% is a lot of money especially when you compare it to DHEIX which has over 80% in IG rating bonds. BTW, ZEOIX also lost -0.6% in Q4/2018.
    I'm just giving several options. If it was me and I was looking for a "cash sub" fund I would use DHEIX and not ZEOIX. See (chart)
  • Bond mutual funds analysis act 2 !!
    @davidrmoran
    When I say 4.5% including inflation it means exactly that. These numbers are based on 3% inflation. In 2010 I planned my retirement date to be at the end of 2017. I postponed it by one year because private healthcare (ACA) triple in price. So, from 2010 to 2018 I gradually decrease our portfolio % in stocks and increase bonds. Since 2018, I mainly invest in bond + make several trades in riskier stuff(stocks,ETFs,CEFs) for days and weeks.
    I used to own a large % in PIMIX for years from 2011-2018. This is the performance of PIMIX vs 50/50 SPY/BND (link)
    The 6% is just a goal but I happened to make more in 2018-2019. According to my Schwab account, my portfolio SD for 2018-19 is 1.7. In Q4/2018 when the SP500 lost almost 20%, my portfolio was down less than 1%. In the last 2 weeks, when stocks lost 12+% my portfolio made money every day.
    Let's stay on the topic of this thread Bond fund analysis.
  • Tom Madell's most recent Mutual Fund/ETF Newsletter
    Hi Guys,
    I have always enjoyed reading Dr. Madell's newsletter as he writes good down to eath thinking. I especially enjoyed reading about his suggested 25/25/50 asset allocation portfolio that he used in this months newsletter to compute portfolio performance. This was of good interest to me since my portfolio now centers around a 20/40/40 asset allocation mix. For me my asset allocation is important, to me, because it reflects my risk tolerance, meets my production needs thus meeting my need based goals. Plus, it is a lesson in how to manage investment risk as well.
    In reading his newsletter take a few notes ... say of at least three things ... that are interest and see if they don't resonate with you in your own investing endeavors. If you can not find at least three things then perhaps you should consider changing your thinking and your philosophy concerning investing.
    Hopefully, he will soon write about how to determine fair value for both the stock and bond markets. I'd be interested in reading his perpsectives on this subject.
    I wish all ... "Good Investing."
  • A look ahead for the overnight potentials in the markets......
    @catch22, very timely and great allocation. You should do well if this correction continues. We rebalanced several weeks ago as the market peaked. Will sit tight until the smoke clear. Don't know if you subscribe to WSJ. Here is a piece from Jason Zweig.
    https://wsj.com/articles/the-pros-have-to-sell-stocks-now-you-dont-11582722004
  • COVID-19 and the portfolio
    Hi @Old_Joe
    Last Friday noon time I was on a normal grocery shopping trip. I stopped at two very large stores; and in both cases spent about 15 minutes wandering (watching) the aisle areas where hand sanitizer and related are located. In both stores the carts in those areas contained the sanitizer, latex or similar gloves and standard face masks.
    An interesting watch, as well as the conversations in the area, too.
  • COVID-19 and the portfolio
    On the "developing news" side of things, here's some excerpts from a very interesting story out of the SF Bay Area regarding "panic buying", as reported by the San Francisco Chronicle:

    Supplies fly off shelves in Bay Area as coronavirus spreads
    Bare shelves and frayed nerves were on full display over the weekend at Bay Area grocery stores as the coronavirus continued to spread.
    Shoppers described chaotic scenes, many of which were shared on social media: stacks of rice and toilet paper snatched up within seconds, checkout lines that snaked through entire stores, and jam-packed parking lots reminiscent of Christmas Eve.
    It’s the latest ripple effect of the outbreak of a still mysterious respiratory illness that in the past two months has caused more than 88,000 people around the world to fall ill. The virus that only a few weeks ago was mostly confined to China now has recorded cases in more than 60 nations.
    According to figures compiled by Johns Hopkins University, the number of fatalities from the illness rose to more than 3,000 on Sunday. More than 2,800 are in China, where the outbreak originated. The first American fatality occurred Saturday in Washington state, and a second death was reported there Sunday.
    With numbers climbing and no vaccine available, institutions such as the World Health Organization and the United States’ Centers for Disease Control and Prevention in recent days have warned that people should be prepared for a pandemic situation, including the possibility of having to stay confined in their homes for one or two weeks.
    The results of that warning could be glimpsed in the depleted shelves and long lines in stores this weekend.
    [At a local Costco] dozens of cars snaked around the block, waiting to enter the parking lot. Shoppers lugged jugs of water and emergency supplies, since there wasn’t a single shopping cart left to grab.
    It will be interesting to see how or if this reaction develops nationwide, and note the stresses that it might place on the national grocery distribution channels.
    Note: The San Francisco Chronicle has no paywall, and should be accessible via the above link.