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First off, I like and own both. As for going all in, DSENX is too new to draw any firm conclusions except that it seems to add some alpha without much downside risk. The closest analogy with a longer track record is the PIMCO stocks plus series. I think they too have had great run(s) but over very long periods of time the alpha is mostly lost. Whether the shiller pe aspect of DL adds alpha over time without significant risk, we'll have to see. PIMIX, while great is absolutely NOT a diversifier of stock risk as you would want in a bond fund holding 50% of your portfolio. It's had some bad moments, including this year, when you would want your bond fund to smooth out the volatility (VGLT up 7%; PIMIX down 1%). To me PIMIX should be treated more like a high yield offering rather than core bond. That said, PIMIX IS my second largest bond holding after Vanguard LT Tax Free.Since 11/13, DSENX (inception date) and PONDX 50/50, much less 60/40, appear to significantly outperform most if not all of these --- except for PRWCX (which of course is on this major tear) and BRUFX. Combo Martin ratio >5 and UI >2 (short-term).
I wonder if the two funds will continue in this vein.
And I found out about DSENX via Snowball, woohoo. I should become a 0.75% adviser and put clients into them and nothing other....
Love DSENX and PIMIX...have nice allocations to both but could never bring myself to going all in on a 50/50 basis. I could see both imploding in a way I really can't see VWINX (PIMIX has had it's "moments" despite it's fantastic record) and DSENX relies on derivatives, so who knows.
I came across DSENX on this site thanks to you, David, and I've been happy with it, but I too would be nervous about putting 50% of my modest portfolio into it. All I have to back up my gut feeling is a general sense that a fund based on derivatives has an additional layer of risks (including counterparty, though Doubleline's site insists that risk is minimal), and that relatively simple quant strategies have a habit of working until they suddenly don't -- or in a best case scenario, until everyone figures out they work and the advantage is lost.Thanks so much for this encouraging response; but can you possibly elaborate on implosion hunches, scenarios and circumstances and any other thoughts or variables, if you have anything beyond gut feeling? (not arguing, just curious).
At some wealthier point, if my thesis continues successful, I will go to DSEEX and PIMIX, yes, and probably not 50/50, actually.
I also see that for the last 1y and 2y, the 50/50 combo beats or equals the mighty PRWCX, not that shortish periods are altogether conclusive. So maybe I have stumbled on a winner combo. Not that this is really original thinking :) .
Love DSENX and PIMIX...have nice allocations to both but could never bring myself to going all in on a 50/50 basis. I could see both imploding in a way I really can't see VWINX (PIMIX has had it's "moments" despite it's fantastic record) and DSENX relies on derivatives, so who knows.Since 11/13, DSENX (inception date) and PONDX 50/50, much less 60/40, appear to significantly outperform most if not all of these --- except for PRWCX (which of course is on this major tear) and BRUFX. Combo Martin ratio >5 and UI >2 (short-term).
I wonder if the two funds will continue in this vein.
And I found out about DSENX via Snowball, woohoo. I should become a 0.75% adviser and put clients into them and nothing other....
Great post, Charles. Thanks for clearing things up !Lipper puts VBINX in the Growth Allocation category. There are 113 such funds in its database ending January 2016, at least 10 years old, oldest share class only, open and closed.
VBINX stacks up pretty well. Here is list from top, sorted by 10 year annualized total return (APR), which includes expenses, reinvested dividends, and any max front load. (As always, no accounting for category drift or survivorship.)
It beat out Dodge & Cox Balanced DODBX, which has delivered 5% APR, placing it 41 out of 113.
Here is same list based a Martin Ratio, which is the risk return adjusted metric used to computed MFO Return Group ratings. Martin is excess total return over 90 day TBill divided by Ulcer Index, as described in the paper by Peter Martin, entitlded: An Alternative Approach to the Measurement of Investment Risk & Risk-Adjusted Performance.
If we look across all the asset allocation categories, VBINX ranks even better.
I think some people use the *M tax adjusted returns feature as a guide, not as the last word on the subject. But it does serve an important purpose and does give investors a general overview of a fund's tax efficiency. The *M guide serves as an important feature to determine returns given tax considerations. Death, taxes and all that. Personally, I do compare tax adjusted returns because they can have a rather large effect on ultimate returns, especially with a high value portfolio such as mine. Having a "stinker" in terms of tax perspective can make a big difference in one's portfolio. Comparing 10-year returns without tax considerations is not an entirely accurate comparison, IMHO. It can become a rather large factor when comparing balanced funds.@willmatt72 I agree that tax considerations are important for funds held in taxable accounts. But I also feel that the "magic number" tax cost (or after-tax return), while offering some insight, is not a particularly refined figure. The best it can do is tell you whether a fund is a stinker from a tax perspective.
Start with the basic fact that different people are in different tax brackets - I would never use a 20% cap gains tax rate, yet that is what is typically used. Quoting from M*'s tax cost ratio methodology: "Per the SEC’s guidance, after-tax returns are calculated with the highest tax rates prevailing at the time of the distribution, as if the investor were in the highest tax bracket."
(This is probably incorrect even for those in the top bracket, as I think it excludes the Medicare surtax of 3.8% on investments, and of course ignores state taxes.)
Then there is the problem that these calculations almost never (except in prospectuses) show the tax effect if one liquidates. That's important because if one is paying taxes on cap gains distributions now, one will pay less in taxes when one liquidates. So while cap gains distributions do have an effect on total returns long term, the effect is not as pronounced as one is led to believe from usual tax cost calculations.
Some of these factors increase the actual tax cost (such as state taxes, surtaxes including Medicare and phaseout of exemptions, etc.), while others decrease the actual tax cost (reduced cap gains on liquidation, not being in the top tax bracket, etc.). It's all very personal - each individual's situation is different.
That's why whatever after tax figures you get are at best crude approximations, and why I either do a much more detailed analysis or use the figures provided only as a filter (don't get a very tax inefficient fund), and not to compare funds.
@shipwreckedandalone: Please share the results of your research when you have finished. I have myself long suspected this is really an equity fund. And having held PRWCX since the mid-'90s, I've always considered it part of my equity allocation. This has caused more than a little consternation and second-guessing as to whether I have it placed correctly. Seems to me various rating sites have classified the fund over the years at various times as equity, moderate allocation, balanced or even hybrid.PRWCX is a great great fund, but possibly an equity fund cloaked as a balanced fund in order to gather assets. I will spend some time researching in that area.
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