- Try DRRAX (Rated neutral by Morningstar) 10 YR Return +3.4% Mentioned in Barron’s favorably in 2020 as a “go anywhere” fund. But I am unable to pull up the article.
- Also try QAI (Hedge fund tracker etf) 10 YR Return 1.8% (Not Rated at Morningstar).
Personally I probably wouldn’t buy such a fund. Hedge funds have the advantage of being able to lock-up an investor’s assets for a set number of years. Allows higher level of risk taking. Mutual funds do not have that advantage. Lose 10% in a year and $$ rushes out the door.
- One (approximation) I’ve owned for short periods in the past (without fully comprehending) is the CEF GUG.
I’d term it “Go anywhere with an emphasis on fixed income”. Quite volatile as CEFs tend to be.
- BCAT (CEF) managed by Rick Rieder might fit your bill. I bailed after it jumped 10 or 15% a year or so ago. Heights bother me. Rieder has a lot of discretion in what to buy.
- You might look at GAA. Globally diversified fund of funds. Risk averse high (media) profile manager some would rather avoid. Spreads the risk around. Seems to have a lot of personal discretion which Morningstar loathes. Exposure to gold / EM. But not billed as “go anywhere.” Morningstar Neutral Rating. 5 YR +5.64% (Disclosure: I own this one.)
-

Thanks again for another excellent show. Several point I like to point out:
1. A 50 Bps rate cut in September seems to be unrealistic. The Fed is in no hurry to cut but Powell made the statement that a rate cut in on the table. The worst is cut too aggressively and too soon, and inflation rises again. Tough act for the Fed to juggle between full employment while keeping inflation at 2%.
2. 6% pullback this week is not usual despite of many bad news. Not all sectors are down. The defensive sectors including consumer staples, health care, and utility are all up from previous week.

Without going into too many details, here are some broad comments:
This is marketed as a reduced risk investment. Prospectus:

The Fund may also hold a substantial portion of its assets in cash or cash equivalents, including treasury bills and money market funds in an effort to maintain high liquidity and to provide additional downside protection by limiting the Fund's exposure to equity market risk. The Fund is designed to generate income while providing some downside protection in the event of broad equity market downturns and also providing some equity market upside participation exposure to the Index.
...
The portfolio managers seek to construct the options-based income component of the Fund’s portfolio by investing in high-income, short-term ELNs with a focus on downside protection.

Derivatives, including ELNs, can be used to reduce volatility. Though as implied at the end of the first paragraph above this comes at a cost of limiting upside potential.
That's to be expected - just as higher risk should bring higher rewards, lower risk is expected to bring lower rewards.
The derivative risk here may still be consequential. While Vanguard is curiously comfortable with trading this ETF, Fidelity requires investors to agree to the following:

Fidelity has designated certain investment products identified as more complex and/or higher risk as “Designated Investments”. I understand that from time to time Fidelity may accept orders for Designated Investments only from self-directed, sophisticated, experienced investors who (1) have represented to Fidelity that they do their own investment research and analysis and (2) agree not to rely to any extent upon Fidelity for advice, guidance, information, direction or recommendations relating to these investments.

Please don't rely on any guidance, information, direction or recommendation received here, either :-)
Personally, I'm comfortable with the concept of ELNs, principal protected notes, etc. ISTM the key risk (aside from market risk) is counterparty risk (will the issuer default?). The other significant factor is the packaging cost. The issuer is packaging securities and options into a single product (note) for a fee (skimming returns).
A risk in this ETF is that it is a black box. They say they are using ELNs in an "options-based income strategy". You're trusting them here. How good is that strategy? How well do they execute it?
At least here you've got a bit of info to go on. The portfolio managers, Burrello, Devine, and Huxon are co- (not lead-) managers of another Invesco fund using the same strategy albeit in a different universe.
GTNDX also uses a "portfolio of equity securities and equity-linked notes designed to generate high income while providing some downside protection." Summary prospectus. The differences are not in the strategy but in the equity portfolio. This is a global portfolio, not a domestic one, and it is actively managed, not an index. Still, it can offer some clues into how well these managers execute the stated strategy.
Its annual report tells the story of what one gives up for reduced volatility.

The Fund’s underperformance over the year [2023] was largely driven by the sub-portfolio of customized ELNs that reduced overall returns relative to the MSCI All Country World ex USA Index as equity markets rallied through much of the year; however, the defensiveness also helped reduce volatility and downside impact to performance during the more volatile periods throughout the year. In addition, the strategy delivered a higher yield relative to the dividend yield of the MSCI All Country World ex USA Index.

I brought up GTNDX because it is one of the highest yielding derivative income funds, and it still only yielded 8% last year (with a 13% total return). (Disregard the 1* rating for GTNDX; that's likely because it's being compared to domestic funds in the same category.)
Domestic stocks typically have lower yields than foreign stocks, so it's an even harder task to reach 9% with a domestic portfolio. Invesco has a domestic fund SCAUX (actively managed) with the same team as GTNDX. In 2023 it (like domestic funds generally) outperformed the sibling global fund, but yielded in the 6% range.
Based on the above, 9% target for RSPA seems more aspirational than realistic. Designed to attract investors, not necessarily to be achieved.
If it's cash flow you're looking for, there are substantially unleveraged CEFs that can get you this yield. True, they return some principal, but that's usually just a transmutation of unrealized gains into distributions. You're not losing your original principal (though the unrealized gain portion of the total principal is being tapped). The industry has come up with an enticing name for this: constructive return of capital.
For example, ETB. Tends to trade at a discount. Based on price, it yields over 9%, all domestic, no leverage. 150+ stocks. Just tossing this out, I haven't researched.
https://www.cefconnect.com/closed-end-funds-screener
Then there is the question of why track an equal-weighted S&P 500 index? John Rekenthaler found that between 1998 and early 2023 " the equally weighted S&P 500 portfolio has thrashed the conventional index." (50% greater value.) But that was then, this is now. As he also wrote, "I cannot prophesy that its success will continue." It didn't.
VFIAX has crushed VADDX over the past YTD, 1year, 5 year, and 10 year. It has also beaten VADDX over the latter's lifetime (since 1997).

From a Reuters article today on Berkshire Hathaway ( BRK/A )
"GEICO UNDERWRITING PROFIT TRIPLES
Quarterly insurance profit rose 54% to $5.58 billion, benefiting from more investment income and Geico's ability to charge higher premiums even as drivers submitted fewer claims."
Anyone care to bet that they are not the only insurance company doing the same?

w/e August 2, 2024..... A WOW week!
As this was quite the positive week for bonds, I've placed a few numbers for your viewing pleasure.
FIRST:
*** UST yields chart, 6 month - 30 year. This chart is active and will display a 6 month time frame going forward to a future date. Place/hover the mouse pointer anywhere on a line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date for a particular item. You may also 'right click' on the 126 days at the chart bottom to change a 'time frame' from a drop down menu. Hopefully, the line graph also lets you view the 'yield curve' in a different fashion, for the longer duration issues, at this time. Save the page to your own device for future reference. NOTE: take a peek at the right side of this graph to find the yield swings of the past week.
For the WEEK/YTD, NAV price changes, July 29 - August 2, 2024
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds/repo/SOFR rates and ended the week at 5.16% yield. Fidelity's MMKT's continue to maintain decent yields, as is presumed with other vendors similar MMKT's.
--- AGG = +2.36% / +3.26% (I-Shares Core bond), a benchmark, (AAA-BBB holdings)
--- MINT = +.06% / +3.6% (PIMCO Enhanced short maturity, AAA-BBB rated)
--- SHY = +1.00% / +3.04% (UST 1-3 yr bills)
--- IEI = +2.1% / +3.4% (UST 3-7 yr notes/bonds)
--- IEF = +3.12% / +3.39% (UST 7-10 yr bonds)
--- TIP = +1.35% / +3.11% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- VTIP = +.6% / +3.47% (Vanguard Short-Term Infl-Prot Secs ETF)
--- STPZ = +.7% / +3.43% (UST, short duration TIPs bonds, PIMCO)
--- LTPZ = +3.46% / +2.42% (UST, long duration TIPs bonds, PIMCO)
--- TLT = +6.04% / +1.71% (I Shares 20+ Yr UST Bond
--- EDV = +8.13% / +.47% (UST Vanguard extended duration bonds)
--- ZROZ = +9.2% / -1.36% (UST., AAA, long duration zero coupon bonds, PIMCO
--- TBT = -11% / +1.44% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
--- TMF = +18.4% / -6.7% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 2-3x version of EDV etf)
*** Additional important bond sectors, for reference:
--- BAGIX = +2.46% / +3.74% Baird Aggregate Bond Fund (active managed, plain vanilla, high quality bond fund)
--- LQD = +2.22% / +2.56% (I Shares IG, corp. bonds)
--- BKLN = -.43% / +3.52% (Invesco Senior Loan, Corp. rated BB & lower)
--- HYG = -.23% / +4.09% (high yield bonds, proxy ETF)
--- HYD = +.78%/+4.29% (VanEck HY Muni)
--- MUB = +1.15% /+1.6% (I Shares, National Muni Bond)
--- EMB = +1.39%/+4.78% (I Shares, USD, Emerging Markets Bond)
--- CWB = -1.49% / +.54% (SPDR Bloomberg Convertible Securities)
--- PFF = -.03% / +5.15% (I Shares, Preferred & Income Securities)
--- FZDXX = 5.16% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022.
Comments and corrections, please.
Remain curious,
Catch

The Week in Charts (08/02/24)
The most important charts and themes in markets and investing, including:
00:00 Intro
00:49 Topics
01:52 Bad News Is Bad News Again
06:48 The Biggest Correction of the Year
11:59 50 Bps in September?
18:41 Bonds Are Acting Like a Hedge Again
21:43 Another Ignominious Debt Milestone
24:21 Millennials and Zoomers Not Leaving the Nest
28:07 Q2 Earnings Update (Microsoft/Meta/Amazon/Apple)
31:52 More Affordable Rents
Video

Wow. No dip buying in this forum!

I guess it depends on your definition of ”dip”. Both the NASDAQ and S&P are still up more than 20% over the last 12 months. Both are ahead by 12% YTD. Not all “dips” are created equal.

"Hello, Darkness, My Old Friend"
(Bill Fleckenstein commenting on today’s market in “The Daily Rap”) :)
Personally, I lightened up on NSRGY (+3.5% today) and added mostly to LSST, but also to WEA and GAA. More like slow trolling for trout than dipping for trash fish. There are many different markets. Consumer staples had a good day. And most bonds rocked.

@Crash , you noted:

Not the time to buy into a Core-Plus bond fund

Why this comment?
Thank you.

I figure, on a day like today, everyone and his uncle will be running into the safety of bonds. (Watching Bloomberg, my idea was confirmed. Today, bonds were an extremely crowded trade. Yields will be falling, even if gradually, while bond share prices rise due to the popularity.) I decided to take advantage of the "sale" going on, and so rather than get into my intended core-plus fund TODAY, I would be better off picking up shares in BHB. It's fallen -7.75% in the past 5 days---after quite a nice run-up. Sticking with it.

Dippers? I are one. 5-day chart shows BHB lost -7.75% in that period of time. So, I bought a slug during today's major conniption fit in the markets.

Correct me if I am wrong. If the Fed drops 0.25%, the money market yield would be 5.29% (VMFXX for example) minus 0.25%. Several more rate cuts would bring money market yield below 5%. While I am not suggesting income investors to bale from money market, reinvestment risk has already arrived as 6 and 12 month T bills have fallen below the current Fed fund rate. I expected the trend to continue.

@Sven - Mmkts will be dropping, but I’m not sure they’ll drop so far so fast. If the FOMC drops the short term rates 0.25% what will current MMkt (5.x%) at VG drop to? So I don’t see a reason to bale out of cash; but I could be wrong. Time will tell.

@Level5, Soon the 5% yield in money market fund will drop too. We have been adding to our bond funds (including ones you mentioned above) and trimming stocks throughout the year. Think bonds can provide 5-7% total return with minimal risk. Stocks are down significantly today.

Powell wants to see more data that inflation is trending downward. September is the earliest for any rate cut but there is no guarantee.
This morning labor market data is not encouraging. In July, U.S. hiring slows to 114,000 job while unemployment rose to 4.3% ( it has been trending upward in the last 3 months). Former economist Claudia Sahm mentioned that we could be already been in recession.
Bloomberg reporting provides further insights on earnings. Amazon is down 9%. Intel’s reporting is alarming - cutting dividend, lowering guidance, and laying off 15,000.
We have been moving from stocks to bonds this year. Also increasing the bond duration in our fixed income portion to more intermediate term.

NIKKEI fell 5.8% overnight. U.S. futures look shaky..
Will some of the FOMC (Federal Reserve Open Mouth Committee) members saddle-up and ride to the rescue today?

Although Powell said that the FOMC is NOT looking at larger 50+ bps rate cuts, the CME FedWatch is showing precisely that. There are also rumors at X/Twitter of a pre-September FOMC rate cut.
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

Japan reached its all-time high in mid-July after 35 years. It's now down -17.5% from that high.

The Health Care Fund generated excellent returns during Ed Owens's tenure.
I wish I had owned it back then!
Last time I checked (perhaps 1.5 yrs. ago), performance during Ms. Hynes's tenure was middling.

Crash, Not a buying opportunity for your want list?

Actually, yes: WCPNX. In a week's time, I'll sell FALN and merge that $$$ into WCPNX, too.
Other buys: I caught ET at $15.95 just the other day. Feels like I got a great price, considering the stock's steady upward movement--- until TODAY. ;) I have been wanting to include an income-producing bond fund that's "safer" than the junk I hold in the IRA. WCPNX will be held in taxable, and therefore AVAILABLE.

For completeness, here is the IPO withdrawal notice dated 8/1/24,
https://www.sec.gov/Archives/edgar/data/2002660/000119312524190510/d623781drw.htm