@Ted Correct me if I'm wrong but is not a 14.19% 3-year annualized return higher than a 14.15% one? And with less volatility: performance.morningstar.com/funds/etf/ratings-risk.action?t=XRLV&region=usa&culture=en_US
Better returns with less risk equals alpha.

@MFO Members: Davidmoran is" seeking a little alpha around SP500", so far that hasn't happened with XRLV. Let's look at the three year return for XRLV and SPY. Low volatility rate around the S&P 500, please. These niche mutual funds only prove that if you build it someone will come along and buy it. Just say no to niche funds.
Regards,
Ted
YTD:
XRLV =6.45%
SPY= 7.96%
1yr.
XRLV=17.96%
SPY= 19.80%
3yr.
XRLV=14.19%
SPY= 14.15%
Expense Ratio's:
XRLV=.25%
SPY= .09%

FYI: Mutual fund fees have increasingly come under the microscope as cheap passive vehicles have proliferated and investors have flocked to them. This trend, combined with a nine-year bull market that has caused fund assets under management to grow (despite many active funds seeing outflows), has driven fees downward. As a result, active funds that haven't lowered their fees have become less competitive on price, and their Price Pillar ratings, a component of the Morningstar Analyst Rating, have gotten worse. Let's take a closer look at four funds whose Price ratings dropped to Negative from Positive during the past five years.
Regards,
Ted
https://www.morningstar.com/articles/879121/weve-downgraded-these-funds-price-ratings.html

I have found the DSE_X funds to do a very good job, as anyone who reads my posts knows, and have often touted the great etn CAPE in addition or instead. But some don't like to deal in etfs / etns whose processes are not easy to understand, and for others it is unavailable, for example at ML.
So using MFOP and other sites, I am always looking for other seemingly consistent small improvements over VOO to sub for CAPE. (Straight low-vol indexes often do not show any outperformance.) This has led me to examine QUAL and LGLV (SP500 subclasses / subscreens, so to speak) and similar.
My latest discovery, while not CAPE (which is GO and HR), is XRLV, which tracks the SP500 Low-Volatility Rate Response Index, whose purported and so-far-so-good advantages are explained here:
http://www.indexologyblog.com/2018/06/06/maintaining-risk-reduction-while-reducing-interest-rate-risk/
https://investorplace.com/2018/06/4-funds-that-will-help-protect-against-rising-interest-rates/

@MFO Members: Here is Barry Ritholtz's thoughts on earnings reports.
Regards,
Ted
https://www.bloomberg.com/view/articles/2018-08-20/reporting-corporate-earnings-daily-would-end-short-term-focus

@ MFO Members: Here is the difference in yield between Morgan Stanley's Sweeps account and several of their Money Market Funds. Proceeds from sells, dividends, or interest are automatically transferred to Bank Sweeps account. In my case the difference is .50% in the Bank account and 1.84% in MVRXX. The move to the MM fund is not automatic, I must call the broker and direct him to do so.
Regards,
Ted
https://www.morganstanley.com/wealth-investmentstrategies/ratemonitor

There's a new (to me, anyway) fund "presentation," as the IOFIX guys call it, up on the site, dated July. Just about everything you ever wanted to know about it, all there in living color ...
Here's a tidbit I'd forgotten: the holdings are almost entirely floating rate (95% in this report).
The one thing I can't find is the current price to par of the holdings (M*'s 68.31 is at least five months stale, and my default position these days is not to trust any M* data without some sort of corroboration). There's a nice graph of purchase price to par on p. 16 of the IOFIX presentation, the average being 67.50, which imho is still pretty decent considering the AUM runup.
P.S. Good info on the manager call, Junkster.

https://seekingalpha.com/article/4146697-perfect-mutual-fund-volatile-times
Thanks Andy. The crew at Garrison Point Capital have always been very detailed in their presentations. As you allude to, a wealth of information. Above is a link that I don’t believe has been previously posted here on their strategy. I thought Charles had a more thorough analysis. But what I like about this one is the analogy with the old geezer and his bankrupt railroad bonds and the discounted legacy non agencies IOFIX specializes in. Yes, I know, comparing apples to oranges but you get the drift.
By the way, here is the analysis by Charles
https://www.mutualfundobserver.com/2018/02/lightning-in-a-bottle-alphacentric-income-opportunities-fund-iofix-february-2018/

My question is: if investors do not weigh losses more heavily than gains (i.e. are averse to losses), then why do so many people here keep looking at Sortino ratios and maximum draw downs? Why don't we have maximum gain data as well?
@msf - great question
It might be (in studying potential downside) that people are seeking to rationalize the risks they take - in effect, to convince themselves that the risks are small compared to the gains they expect.
We don’t have maximum gain data. How could you? :) But after a 10-year bull market most risk-asset numbers look rosey. By contrast, after a bear market where 40-50% losses were experienced, the reverse might be the case. People might need convincing that “The sun will come out tomorrow.”
There’s a reason the play Annie is set in the Great Depression years. Here’s some well done clips from live stage. Gotta love it.

Periodically, I will go to CampaignMoney.com and use their screener to see how fund managers are contributing to different political campaigns: https://campaignmoney.com/advanced.asp
For instance:
https://campaignmoney.com/advanced.asp?searchtype=contributors&cycle1=16&lname=Singer&fname=Paul&work=Elliott+Management&occup=&zipcodes=&fdate=&tdate=&state=&cycle2=16&cmtetype=&cmtename=&cmteorg=&igc=&cmteparty=&cycle3=16&cndoffice=&cndtype=&cndlname=&cndfname=&cndstate=&cndparty=&orderby=
or
https://campaignmoney.com/advanced.asp?searchtype=contributors&cycle1=16&lname=Herro&fname=David&work=&occup=&zipcodes=&fdate=&tdate=&state=&cycle2=16&cmtetype=&cmtename=&cmteorg=&igc=&cmteparty=&cycle3=16&cndoffice=&cndtype=&cndlname=&cndfname=&cndstate=&cndparty=&orderby=
or
https://campaignmoney.com/political/contributions/robert-arnott.asp?cycle=16
or Dark Money which is worse:
https://opensecrets.org/dark-money/top-election-spenders

Great discussion.
However, I am now puzzled by how IOFIX portfolio increased in value by almost 1% in one day, given that it "did not come from any specific event or the repricing of any illiquid bonds".
Thanks

@MFO Members: Speaking of high-yield, on 2/8/17 I bought 50 Hertz 7.375% B3 1/15/21 bonds at slight discount of $98.12. The bonds closed yesterday @ 100.750. So far so good.
Regards,
Ted

Just migrated MFO Premium to DreamHost from SiteGround, which has hosted the site since launch in November 2015. The reason for the change is that Paypal recently started enforcing more up-to-date versions of TLS (Transport Layer Security) than were available on SiteGround’s server, so it stopped handshaking with our subscriber management software, called UserBase. That meant we had to manually approve subscribers after they paid on PayPal. That issue should be fixed now.
We apologize for any hassle!
The site appears fully functional and the transition should be transparent, but if you see anything amiss (for example, missing newer WatchLists), please email ([email protected]) and we will address soonest.
As always.

FYI: Vanguard, the leader in low-cost investing, today launched the largest suite of commission-free ETFs available to investors.1 As announced in early July, Vanguard is offering commission-free online transactions on approximately 90% of all ETFs—nearly 1,800 of the roughly 2,000 ETFs currently trading on the major exchanges. Vanguard has excluded inverse and leveraged ETFs due to their highly speculative nature.
Regards,
Ted
https://pressroom.vanguard.com/news/Press-Release-Vanguard-Launches-Commission-Free-ETFs-082118.html

FYI: We’re faced with a host of thorny retirement issues: Keep Social Security solvent. Make Medicare affordable. Many Americans aren’t saving enough. They want to retire earlier than they can reasonably afford. They’re effectively financially illiterate.
But in the end, you don’t need to worry about all Americans. Instead, what you need to worry about is you.
Want a comfortable retirement? Here are my 10 commandments:
Regards,
Ted
https://www.marketwatch.com/story/the-10-commandments-of-retirement-2018-08-21/print

FYI: New York City has stringent anti-idling laws for parked vehicles. The City even pays bounties for citizens who send in video evidence of people sitting in their cars with their motors running. The spirit of the law is to prevent wasting gas and to improve community conditions.
Leaving cash in your brokerage account is akin to burning fuel without getting anywhere. It’s not productive for you or your long-term investment goals. I’m anti-idling for the long-term investor. Cash is basically a zero-expected return asset class. But the reality is that there’s always going to be some cash in your brokerage account. Cash generally comes from deposits you make, proceeds from selling your investments and dividends. And some investors simply prefer having some portion of a portfolio in the safety and surety of cash.
Regards,
Ted
https://www.blackrockblog.com/2018/08/15/avoid-idle-cash/?utm_source=blog&utm_medium=hero&utm_campaign=hero

Josh Brown nails it perfectly in his comments this morning in response to the JPM announcement.
http://thereformedbroker.com/2018/08/21/a-portfolio-is-not-a-plan-2/

There's a new (to me, anyway) fund "presentation," as the IOFIX guys call it, up on the site, dated July. Just about everything you ever wanted to know about it, all there in living color ...
Here's a tidbit I'd forgotten: the holdings are almost entirely floating rate (95% in this report).
The one thing I can't find is the current price to par of the holdings (M*'s 68.31 is at least five months stale, and my default position these days is not to trust any M* data without some sort of corroboration). There's a nice graph of purchase price to par on p. 16 of the IOFIX presentation, the average being 67.50, which imho is still pretty decent considering the AUM runup.
P.S. Good info on the manager call, Junkster.

This thread is a followup to a bullpen post:
https://mutualfundobserver.com/discuss/discussion/40777/is-loss-aversion-a-myth
That post links to a column that in turn cites the paper that the Scientific American piece linked here is summarizing. How's that for circular references :-)
That column argues that loss aversion is still real, though it suggests a refinement to the concept.
My question is: if investors do not weigh losses more heavily than gains (i.e. are averse to losses), then why do so many people here keep looking at Sortino ratios and maximum draw downs? Why don't we have maximum gain data as well?
That's not a joke. I'm as concerned when a fund I have performs way out of line with my expectations on the upside as when it underperforms.
I owned a legacy fund that had originally been an income oriented sector fund that evolved into a respectable broad based large cap value fund. I had been considering selling it for a variety of reasons. What finally made me pull the trigger was one year when it wound up as the top performing LCV fund (can't verify, but M* says it was in the top 1%).
The fund was so volatile that even with top quartile returns for the past 3, 5, and 10 years, it had a 1* rating. Yet the last straw for me was the upside risk.
So, why all these biased metrics? Junk statistics, or do investors really care more about their risk of loss then their risk of gain?

FYI: .J.P. Morgan's new digital brokerage service comes with free trades, portfolio building tool and access to equity research.
.The bank's new trading service starts next week and will be available to its 47 million mobile or online users.
.All customers get 100 free stock or ETF trades in the first year. Those with Chase Private Client get unlimited trades.
.CEO Jamie Dimon hinted at this move in 2016, citing Amazon Prime as his inspiration.
Regards,
Ted
https://www.cnbc.com/2018/08/21/jp-morgan-to-unveil-new-investing-app-with-an-eye-catching-disruptive-price-free.html

Conclusion: “In sum, our critical review of loss aversion highlights that, even in contemporary times, wrong ideas can persist for a long time despite contrary evidence, and therefore, that there is a need to critically assess accepted beliefs and to be wary of institutional consensus in science and otherwise. While loss aversion has frequently been cited to explain why people are biased toward the status quo, perhaps fittingly, the case of loss aversion illustrates the importance of challenging science’s status quo.”
Sounds like somebody trying to impress their college prof.
I don’t know. If everyone were more concerned about possible loss than possible gain, you’d think that ...
- Sports betting would cease
- Casinos would close / State lotteries would go bust
- Motorists would typically drive 10 mph under posted limits
- Manias and bubbles in assets (like stocks and real estate) would never exist