recommendation on good replacement for Harbor International fund It's always difficult to divine hedging policies, even with M* analyst breadcrumbs. FWIW, M* writes that FMIJX "fully hedges its non-U.S. currency exposure to the dollar." Not merely that it is
currently hedged.
The
prospectus, um, hedges its currency policy by saying that it "
may hedge a significant portion of its foreign stock investments", but the rest of the sentence suggests a general bias toward hedging: " in an effort to have its returns more closely reflect the market performance of its investments, rather than the value of the currency".
That is, it hedges to take currency out of the equation, not to protect one way against a rising dollar. That suggests hedging most of the time.
To build on JoJo26's statement, impressions often don't match reality. It feels like the dollar is going up, but
it hasn't over the past year. I suspect that feeling is due to at least a couple of factors: the dollar is already very high (so just standing still, it feels like its value is growing), and Brexit
pummeled the pound Sterling (making the dollar look good relative to one currency, though not relative to the world).
recommendation on good replacement for Harbor International fund For foreign large growth, JOHAX is my choice, although it is recovering from a serious drop in 2015. Over the past few years, I have cut back on pure foreign stock funds in favor of global funds. My best result has been with ARTRX, worst with now-departed Oakmark offerings. Good global managers should be able to allocate more or less to foreign equities as conditions warrant and do it better than I can. If I recall correctly, FMIJX hedges currency when conditions call for it, not always.
recommendation on good replacement for Harbor International fund While what TD1 says is true about the potential whipsaw when the dollar does finally decline, I wouldn't make your decision for FMIJX based on the FX hedge alone. If you like the way FMI approaches investing, which is to construct a concentrated portfolio of high quality businesses at cheap valuations, then you should still consider the Fund.
To speak to performance, yes the FX hedge has benefited the Fund longer-term, however, over the past year (through 6/30) the EAFE was down 10% in both USD and local currency terms, and the Fund up 75 bps => hedge has not been the main reason for outperformance. Since inception, the Fund is outperforming EAFE (USD and local).
Investors Pulling Money Out Of Prime Money Funds @msf- Speaking as an "unnatural person", I'm also wondering what to do with the cash that we've been keeping in American Funds and American Century MMFs. Not particularly worried about safety/stability of either of those companies, but makes nothing there, might make more sense to move to FDIC protection.
I took a quick look at AC brokerage accounts - curious that they don't seem to say that their
sweep options (transaction/core account) will be changing, or even give you the option to choose their government MMF TCRXX.
You're right that all of AC's MMFs have painfully low yields, ranging from a "high" of 0.07% federally tax free (BNTXX) to a low of 0.0
1% taxable (TCRXX). I agree with you that at least for a taxable account, if you can wait a day or two for access to your cash, an online savings account (yielding around
1%, insured) looks much better.
The difficulty is in doing this with IRAs. It's not so easy to move money back and forth between IRAs at different custodians. Which is why the 0.45% MMF yield with FZDXX (Fidelity $500 IRA min) or VMMXX (Vanguard $3K min) seem to make sense for cash in IRAs.
M*: 3 Funds That Go Their Own Way
Fund Focus: Vanguard REIT ETF: VNQ Real estate funds remains 14% our of equity side.
Side note: the past several weeks have seen very strong swings in pricing on a daily basis close. One half of a percent and greater in both the up and down side of pricing.
We're staying put with our real estate until something indicates it is time to leave the area.
Fund Focus: Vanguard REIT ETF: VNQ US REIT sector is one of the brighter sector this year. YTD return of VNQ is up 16.8%.
any one jumping on the oil/energy train?? @MFO Members: After briefly touching bear market territory earlier in the session, crude oil prices have caught a bounce intraday, taking WTI out of bear market territory (20% decline from closing high of $5
1.23). Despite the bounce, though, crude oil is still down
19.5% from its 20
16 high, so it’s still very close to entering a new bear.
Regards,
Ted
Crude Catches A Bounce Out Of Bear Territory:
https://www.bespokepremium.com/think-big-blog/crude-catches-a-bounce-out-of-bear-territory/
any one jumping on the oil/energy train?? Quite happy with GASFX in the energy sector:
Returns: 1/3/5/10 yrs:
+9.87% +11.80% +12.91% +10.58%
YTD:
23%
Multi-Asset Income Funds @JohnChisum, Like you I am facing the same issues with bonds. Perhaps I am a bit early, I reallocated high yield and emerging market debts to US investment grade bonds, intermediate term. Also I am keeping some in Vanguard Total Bond Index In my 40
1(K). I also notice that some balanced fund such as TRP Capital Appreciation, PRCWX, has reduced bond allocation while holding double digit in cash. Are they telling us something?
Investors Pulling Money Out Of Prime Money Funds Hi
@Old-Joe
How about ACITX ? This equals gov't. or either of the American's offer a short term gov't. bond fund? Fido has a short duration gov't. bond fund that has a YTD of +
1.9%.
And no, the TIPS fund is not because of inflation, but is getting the action because of investors moving into U.S. gov't. related; as is part of the action for such a fund type.
My no fee, no guarantee of continued positive movement in something like TIPS funds remains unchanged. Please sign below to trigger the hold-harmless agreement:
____________________________
Have a pleasant time at the river, if you two are traveling that direction.
Catch
Investors Pulling Money Out Of Prime Money Funds
Investors Pulling Money Out Of Prime Money Funds The quote above talks about generic "investors" pulling cash from MMFs, but the article goes on to write about corporate investors.
It would be interesting to know whether a disproportionate amount of outflows are coming from the institutional side. Funds open to institutional investors must either be limited to government securities such as Treasuries, or must have a floating NAV. One means low returns, the other means risk of loss.
In contrast, individual investors ("natural persons") can continue investing in retail MMFs which invest in other securities and still have a fixed $1 NAV. (The gotcha is that in times of stress, they're allowed to impose a redemption fee and/or hold your cash for ten days.)
The outflow is causing yields to rise (as noted in the article), which is beneficial to individuals, especially in brokerage IRAs. One typically has at best a choice between a bank sweep account paying virtually nothing or in-house MMFs. With yields rising, at least one can now get at least a few cents on a captive sawbuck.
Fund Focus: Vanguard REIT ETF: VNQ
Q&A With C. Thomas Howard: Is Active Management Dead? Not Even Close FYI: Several years ago, I interviewed C. Thomas Howard of AthenaInvest to learn more about his firm’s unique implementation of behavioral finance. This turned out to be one of the best performing pieces of content Enterprising Investor has ever run. But it isn’t just AthenaInvest’s originality that’s so compelling, so too is its strong performance.
Howard also has an interesting pedigree as a recovering and almost lifelong finance professor turned practitioner. Recently he has focused his attention on another problem: determining whether or not active management is dead. In addition, he is dedicated to uncovering ways active managers can improve their performance — and he has the academic chops to back up his story.
Regards,
Ted
https://blogs.cfainstitute.org/investor/2016/07/26/is-active-management-dead-not-even-close/
Investors Pulling Money Out Of Prime Money Funds FYI: (This is a follow-up article).
Assets in money market funds that invest in short-term corporate debt securities have fallen to
17-year lows, according to new data from the Investment Company Institute, a fund industry trade group. Investors are pulling their money from the investment vehicles ahead of money market fund reform due to take effect in October.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2016/07/28/investors-pulling-money-out-of-prime-money-funds/
